Stephanie & Steve Catcher - Home
Kitchener & Orangeville
Toll Free: 1-800-461-2686
 

Using Your RRSPs To Buy A Home - The Home Buyers' Plan (HBP)

The Home Buyers' Plan (HBP) is a program that allows you to withdraw funds from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. You can withdraw up to $25,000 in a calendar year.

Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year.

Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included in your income for that year.

 

Before applying to withdraw funds under the HBP you must meet the following conditions (as quoted on CRA site):


•You have to enter into a written agreement to buy or build a qualifying home for yourself, for a related person with a disability, or to help a related person with a disability buy or build a qualifying home. Obtaining a pre-approved mortgage does not satisfy this condition.
•You have to intend to occupy the qualifying home as your principal place of residence no later than one year after buying or building it. If you buy or build a qualifying home for a related person with a disability, or help a related person with a disability buy or build a qualifying home, you must intend that that person occupy the qualifying home as his or her principal place of residence.
•You have to be considered a first-time home buyer.
•In all cases, your repayable HBP balance on January 1 of the year of the withdrawal has to be zero.

 

Repaying your withdrawals:


Over a repayment period of no more than 15 years, you have to repay to your RRSPs the amounts you withdrew under the HBP. Generally, for each year of your repayment period, you have to repay 1/15 of the total amount you withdrew, until the full amount is repaid to your RRSPs or PRPPs. Your repayment period starts the second year following the year you made your withdrawals.

To make a repayment under the HBP, you have to make contributions to your RRSPs or PRPPs in the year the repayment is due or in the first 60 days of the following year. Once your contribution is made, you can designate all or part of the contribution as a repayment under the HBP.

 

Example:


In 2011, Robert withdrew $6,000 from his RRSPs to participate in the HBP. Robert's repayment for 2013 is $400 ($6,000 ÷ 15).

In 2013, Robert contributes $8,200 to his RRSPs. Robert could deduct the full amount as an RRSP contribution on line 208 of his 2013 income tax and benefit return because his notice of assessment for 2012, shows that he has an RRSP deduction limit of $11,000 for 2013. However, he knows an HBP repayment is required.

Therefore, Robert files Schedule 7 with his 2013 income tax and benefit return and records his $8,200 RRSP contribution on line 245. He designates $400 of this amount as an HBP repayment on line 246 of Schedule 7. Robert deducts the remaining $7,800 as an RRSP contribution on line 208 of his 2013 income tax and benefit return.

 

The HBP can be an effective way to own your own home. Please ensure to speak to a financial advisor for assistance and consult a licensed account when filing your repayments.

 

 

add a comment
Subscribe to this Blog Like on Facebook Tweet this! Share on Google+ Share on LinkedIn

Contributors

Jennifer Roth
15
February 5, 2015
show Jennifer's posts
Stephanie Catcher
16
December 31, 2014
show Stephanie's posts
Gary Brown
5
September 7, 2014
show Gary's posts
Tia Lougas
7
August 18, 2014
show Tia's posts
Liana Carvalho
9
July 22, 2014
show Liana's posts
Steve Catcher
6
June 9, 2014
show Steve's posts
Richard Ventura
3
May 27, 2014
show Richard's posts
Mark Carruthers
6
April 3, 2014
show Mark 's posts
John Arnott
4
April 2, 2014
show John's posts

Archive

Current

Show Latest Posts

2015

February
10 Things Your Home St ...

2014

December
Is Furniture Holding y ...
October
Is your Furniture Hold ...
September
Here's Something That ...
August
Front Door Fix-Up
Why Neutral Is Best Wh ...
July
When Should You Stage?
Last will and testamen ...
Multiple Offers - Sell ...
Steps to financial ind ...
How to Score Free Land ...
June
Multiple Offer - Buyer ...
Home Staging in 3 Step ...
Wild Things
What is the difference ...
May
Heritage in a Home
Renewing Your Mortgage ...
Are you Attending Open ...
What Is Home Staging?
Keep your Floors Clean ...
Cleaning Tips For Sell ...
April
Thinking Bungalow
Leadership Advice: How ...
When Should You Call a ...
Understanding market v ...
Curb Appeal
Send Me Your Wish List
Outside your Home Fact ...
Home Staging Curb Appe ...
Keep on top of your ch ...
Laddering investments
Home Based Business
How to choose a furnac ...
Your Couch is a Beast!
March
How to renovate and st ...
8 Reasons Why You Shou ...
Using Your RRSPs To Bu ...
Location, Location, Lo ...
Home renovations & Hom ...
Aim Higher. Be Differ ...
Your Photos are Distra ...
Fixed vs. Variable Rat ...
Why Home Staging Works
Why should you have li ...
Heating With Wood
GOALS 2014
Signs that your Home i ...
February
How to Compromise and ...
(VIDEO) Barbara Corcor ...
2013 RRSP Deadline is ...
Watch Your Steps...
Home Searching for Pet ...
Your smoke alarm may f ...
OLYMPIC LESSONS
Why do you love your H ...
5 Tips for Prioritizin ...
Save Money by Staging ...
Make the best choice f ...
Home Inspectors - Buye ...
Be Our Guest
Using a Mortgage Broke ...
Let's do the Time Warp ...
January
Going away for the Hol ...
Choosing a home inspec ...
Home Staging Myths
Do it for Yourself
3 Tips for Making a Ne ...
Dryer vents could be a ...
Prepare your house for ...
Welcome to our site!
Survey Helps Home Sell ...

Tags

Everything Home Staging Mortgages Decorating Real Estate Home Inspection Insurance Family Protection Home Protection Home Decor Tips & Tricks Promotions Housing Market Orangeville Kitchener/Waterloo Buying a Home Selling a Home Home Repair Home Maintenance
 
Stephanie & Steve Catcher sales representatives
© Copyright 2017 Stephanie and Steve Catcher. All Rights Reserved. Web Design and Content Management by REM Web Solutions.