RRSP Home Buyers Plan
The Home Buyer's Plan (HBP) is a government program that allows home buyers to withdraw up to $25,000 from their Registered Retirement Saving's Plan (RRSP) to buy or build a new home.
However, to take advantage of the Home Buyer's Plan, you must be considered a first-time buyer.
You are not considered a first-time home buyer if you or your spouse have owned a home that you have occupied as your principal place of residence in the past five years. The intended individual must qualify for the Disability Tax Credit (DTC), and this home must be more accessible or better suited to the care of this individual.
Before you can withdraw funds, you must enter a written agreement that specifies whether you want to buy or build your new home and must occupy this space no later than a year after buying or building this new home.
Once you meet those conditions, each person can withdraw up to $25,000 tax-free from their RRSP for a new home. Couples, including common-law, can withdraw up to $50,000. You will not pay income in these amounts as long as you will repay the funds into an RRSP in the future. Existing homeowners can also use this program to purchase an accessible home or a home for a disabled dependent relative.