The Home Buyer’s Plan (HBP) is a government program that allows home buyers to withdraw up to $60,000 from their Registered Retirement Saving’s Plan (RRSP) to put towards buying a home or building a new home. The funds have to be within your RRSP for a minimum of 90 days prior to the purchase of the home.

Before you can withdraw funds, you have to be entered into a written agreement that specifies whether you will be buying or building your new home.  You also must occupy this space no later than a year after buying or building this new home.

To take advantage of this program you have to be considered a first-time buyer. You are not a first-time home buyer if you (or you and your spouse) has owned a home which you have occupied as your principal place of residence in the past 5 years.

Once those conditions are met each person can withdraw up to $60,000 tax-free from their RRSP for a new home. Couples, including common-law, can withdraw up to $120,000. You will not pay income tax on these amounts as long as these funds will be repaid into an RRSP within 15 years, with up to a 5 year grace period before payments begin. Existing homeowners can also use this program to purchase an accessible home or a home for a disabled dependent relative. The intended individual must qualify for the Disability Tax Credit (DTC) and this home must be more accessible or better suited to the care of this individual.

Please be aware that the funds can take several weeks to arrive depending on your financial institution. Plan ahead and get started on the process as early as possible.

NOTE: While I try to keep all information relevant, accurate, and up-to-date, changes to rules may happen without warning and mistakes may arise. Please always seek further clarification and talk to your mortgage lender, financial institution, or real estate lawyer for further information regarding the RRSP Home Buyer's Plan.