If you’ve been saving money tax-free in an RRSP, you may be interested in the federal government’s Home Buyers Plan (HBP). The plan allows first-time homebuyers to apply up to $20,000 of RRSP funds towards a down payment on a qualifying home.
Essentially, you are borrowing this money from yourself, with a commitment to replace the funds taken from your RRSP.
- You have 15 years to replace the RRSP funds.
- Repayment must begin two years after the home purchase.
- Every year, you’ll receive a notice of assessment with your required payment and remaining balance.
- All funds must be withdrawn from the RRSP within 30 days of closing.
Every individual involved the home purchase (such as your partner or spouse) can participate in the HBP and withdraw up to $20,000 each, as long as:
- It is the first home for all participants.
- The home is used as a principal residence.
Visit Canada Revenue Agency for more information, or contact Conexia Mortgage to discuss the RRSP Home Buyers Plan.
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