The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy a home for yourself without having to treat the RRSP withdrawal as income. The withdrawn amount must be paid back to your RRSP within a period of no more than 15 years. If you do not repay the amount due each year to your RRSP, then that amount will be included in your income for that year.
To participate in the HBP, you have to be considered a first time home buyer. You are not considered a first time home buyer if you or your spouse (including common law) owned a home that you occupied as your principal place of residence during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.
Other conditions that apply are:
- Property must be intended as principal residence
- Withdraw up to $60,000 per person ($120,000 for a couple)
- RRSP funds must be in plan for 90 days
- Funds must be paid back over 15 years
- Repayment starts the second year after the year that the funds were withdrawn
- Additional grace period extension of three years – Repayment starts the fifth year for those who withdrew from their HBP between January 1, 2022 and December 31, 2025
- RRSP funds withdrawn must be clear of RRSP loans
- “Locked in” RRSP’s are usually not eligible
- Must have written purchase agreement before applying for funds
- Your HBP balance on January 1 of the year of the withdrawal is zero