Buying your first house can be a great investment, but finding the cash to do so can be hard. The Home Buyers’ Plan (HBP), a program offered by the Government of Canada, is one way to help you make the big move, but there are a few things you need to know before you take the next step.
What is the Home Buyers’ Plan?
HBP is a government program that helps you facilitate the purchase of your first home by allowing you to withdraw a portion of your RRSP to use as a tax-free, cash down payment.
How much can you withdraw?
Each spouse or partner can withdraw up to $25,000 from his or her RRSP, tax-free. The funds can be withdrawn from any RRSP account at any financial institution.
When can you withdraw the money?
The money must be in your RRSP investment account for at least 90 days before you can withdraw it through the HBP. All withdrawals have to be received within the same calendar year.
How long do you have to use your withdrawal?
You have 30 days from the signing date of the withdrawal to use the funds.
When do you need to pay back the funds withdrawn through the HBP?
The government gives you two full calendar years before you need to start paying back your HBP. You have up to 15 years to complete the payments.