Buying a home






There is a program available to all Canadians to assist them in buying a home by providing access to their RRSP’s tax free.  The Home Buyers Plan (HBP) allows you to withdraw up to $35,000 (increased from $25,000 in the 2019 Federal budget) from your RRSP to buy or build a qualifying home for yourself of a related person with a disability.  

There are several withdrawal conditions and eligibility requirements to be met in order to take advantage of the program.  First, you must be considered a first-time home buyer.  You are considered a first-time home buyer if, in the four years prior to a home purchase, you did not occupy a home that you owned or one that your current spouse of common-law partner owned.  In addition, if your previously participated in the HBP, your HBP balance must be zero as of January 1stof the year your buy or build the qualifying home to be eligible again.

Second, you must have a written agreement to buy or build a qualifying home, either for yourself or for a related person with a disability.  A qualifying home is a housing unit located in Canada.  A share in a co-operative housing corporation that only provides you with a right to tenancy in the housing unit does not qualify.  

Third, you must be a resident of Canada when you withdraw the funds from your RRSPs under the HBP and up to the time a qualifying home is built. 

Fourth, you must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.  

You have up to 15 years to repay to your RRSP the amounts you withdrew from your RRSP under the HBP.  Your repayment period starts the second year after the year when you first withdrew the funds form your RRSP. For example, a withdrawal in 2020 means your first repayment is due in 2022.  The minimum amount you are required to repay each year is 1/15thof the total withdrawal.  If you do not make a repayment in any given year, then this payment amount will be included in your income for that tax year.    

Each year, Canada Revenue Agency will send you a Home Buyers Plan statement of account with your Notice of Assessment.  This will include the amount you have repaid so far, your remaining HBP balance and the amount you must contribute to your RRSP and designate as a repayment for the following year.  Please note that HBP repayments do not affect your RRSP Deduction Limit. 

 As always, we suggest your work closely with a financial advisor to see if the HBP will work for you.


Be Well Advised.



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