The home buyers’ plan (HBP) helps first-time home buyers save for a down payment by allowing them to withdraw from their registered retirement savings plan (RRSP) to purchase or build a home without having to pay tax on the withdrawal.
You are considered a first-time home buyer if you or your spouse or common-law partner have not owned a home that you occupied as your principal residence at any time during the relevant calendar year or in any of the four preceding calendar years.
To provide first-time home buyers with greater access to their RRSPs the budget proposes to increase the HBP withdrawal limit to $35,000 from $25,000. As a result, a couple will potentially be able to withdraw $70,000 from their RRSPs to purchase a first home. This will be available for withdrawals made after March 19, 2019.
To help those who have experienced a breakdown in their marriage or common-law partnership, the budget also proposes that these individuals may be permitted to participate in the HBP, even if they do not meet the first-time home buyer requirement. This is provided that they live separate and apart from their spouse or common-law partner for a period of at least 90 days as a result of a breakdown in their marriage or common-law partnership. Certain other conditions also need to be met. This measure will be available for HBP withdrawals made after 2019.
Whether you’re a first time home buyer or seasoned real estate investor when you’re looking to buy a home, there are often many things you need to consider and questions you need answered. Here are some additional articles you may find helpful.
