How does the Home Buyers’ Plan
(HBP) work?
Each purchaser may borrow up to $20,000 from their RRSP under the Home Buyers’
Plan. (The funds must have been in the RRSP for at least 90 days prior to withdrawal
to be eligible under the program)
Provided you buy or build a qualifying home and meet all of
the conditions for making a withdrawal under the Home Buyers’ Plan, you
can use the particular funds you withdrew under the Home Buyers’ Plan
for other purposes. (Not only down payment and closing cost, but for any other
purpose you choose.)
This program is available to the first time home buyer only.
(You are considered a first time home buyer if, at any time during the period
beginning January 1, 1995 and ending 31 days prior to your withdrawal in 1998,
you did not own a home while you occupied it as your principal place of residence)
This information is current throughout 1999. And the program
has been extended indefinitely.
Repayment of the funds back to your RRSP can be made over 15
years. (The repayment period starts in 2001 and ends in 2015)
If the amount is not repaid in a year, that year’s repayment
amount will be added to your income and taxed.
In order for the home to qualify it must be located in Canada
and intended to be used as your principal residence.
This program may be used in connection with the 5% down program.
If you have any questions about the HBP program you can call
the General Enquiries section of your local tax services office. You can find
the address and telephone number listed under “Revenue Canada” in
the Government of Canada section of your telephone book.
If you use a Telecommunication Device for the deaf (TDD), you
can get tax information by calling the toll-free, bilingual TDD enquiry service
at: 1-800-665-0354
