| Home Buyers Plan
The HBP is a program that allows you to withdraw
funds from your RRSPs to buy or build a qualifying home.
After January 27, 2009, you can withdraw up to $25,000 in
a calendar year. The home can be for you, or it can be for
a related person with a disability. If the home is acquired
by a person with a disability or for a related person with
a disability, one of the following should apply:
- it is more accessible to that person than
his or her current home; or
- it is better
suited to that person's needs.
As an HBP participant, you can acquire the
home for the related person with a disability, or you can
provide the withdrawn funds to the related person with a
disability to acquire the home. You do not have to include
eligible withdrawals in your income, and your RRSP issuer
will not withhold tax on these amounts. You can withdraw
a single amount or make a series of withdrawals throughout
the same calendar year, provided the total of your withdrawals
is not more than $25,000. If you buy the qualifying home
with your spouse or common-law partner, or with other individuals,
each of you can withdraw up to $25,000. Therefore, if you
withdraw funds up to $20,000 from an RRSP after December
31, 2008, and before January 28, 2009, you may withdraw additional
funds after January 27, 2009, as long as the total of all
withdrawals in 2009, does not exceed the new maximum amount
of $25,000. However, under existing requirements, you or
your spouse or common law partner may not own the qualifying
home for more than 30 days before the final withdrawal is
made in 2009.
Note Your RRSP contributions must remain
in the RRSP for at least 90 days before you can withdraw
them under the HBP, or they may not be deductible for any
year. Generally, you have to repay all withdrawals to your
RRSPs within a period of no more than 15 years. You will
have to repay an amount to your RRSPs each year until your
HBP balance is zero. If you do not repay the amount due for
a year, it will have to be included in your income for that
year. For further details on HBP: http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-e.html#P92_8389
Updated: Apr 27, 2010
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