On Topic

Home Purchase

Home Buyers' Plan (HBP)

The RRSP Home Buyers Plan allows you to borrow money from your RRSP to buy or build a home. The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

Conditions for participating in the HBP

Only the individual who is entitled to receive payments from the RRSP can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the plan owner of each RRSP. Your RRSP issuer will not withhold tax on these amounts. Generally, you will not be allowed to withdraw funds from a locked-in RRSP.

To participate in the HBP, ONE of the following conditions must apply:

In addition, ALL of the following conditions must apply:

If a condition is not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. You will have to include the RRSP withdrawal as income on your income tax return for the year you received the funds. If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate at a later date.

You must repay the money you withdraw from your RRSP over a period of not more than 15 years. You will not have to pay income tax on the money you withdraw as long as you replace it within 15 years. Because you already received the tax benefit for the money you withdraw, your replacement payments must be made with your after-tax income. The repayment period begins two years after the year in which the withdrawal is made.