Home Buyers' Plan (HBP): Who Qualifies and What You Get
Learn how first-time homebuyers can withdraw funds from their RRSP tax-free to help pay for a down payment on a home.
The Home Buyers' Plan (HBP) allows you to access your savings to help buy your first home. This program lets you take money out of your RRSP without paying immediate taxes on it.
Who it's for
This plan is specifically designed for first-time home buyers.
What you get
You can withdraw up to $60,000 from your RRSP tax-free to use toward a down payment on your home.
What it costs you
While you do not pay tax when you take the money out, you must pay it back. You are required to repay the full amount you withdrew to your RRSP over a period of 15 years.
The catch to know
If you do not follow the repayment schedule and fail to pay the money back as required, the amount you missed will be taxed as income for that year.
How to apply
- Ensure you meet the definition of a first-time home buyer.
- Check your RRSP balance to ensure you have sufficient funds available.
- Follow the withdrawal process through your financial institution.
- Set up a plan to manage your repayments over the next 15 years.
For more details, visit the official portal: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html