The term “First Time Home Buyer” is thrown around often these days and is tagged in countless incentive based programs and policies. In the future I will dedicate an entire newsletter to the various First Time Home Buyer privileges and programs, but today I will talk about one in particular, the RRSP Homebuyer Plan.

What is the RRSP Home Buyer Plan?

The RRSP Home Buyer Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plans (RRSPs) to buy or build a home for yourself or for a related person with a disability. 

Here are the 3 major features of the RRSP Home Buyer Plan:

• Access up to $35,000 of RRSP funds for the purchase of a home
• Take as long as 15 years to pay it back
• If you don’t repay the loan within the 15 year period, the full amount of the loan will be declared as income and you will be subject to tax at your marginal rate

Eligibility criteria for the RRSP Home Buyer Plan:

• You must be considered a first-time home buyer
• You must provide evidence of a written agreement that details the purchase of the home
• You must be a resident of Canada. Click here to see the the residency status guidelines.
• You must intend to occupy the property as your principal residence within one year after buying or building it

Can I qualify for the RRSP Home Buyer Plan, TWICE?

Yes!  As long as you satisfy the following conditions:

• Your previous HBP loan must be paid in full and have a $0 balance on January 1 of the year of your new withdrawal 
• You can (once again) be considered a first-time home buyer if, in the four year period, you did not occupy a home that you owned, or one that your current spouse or common-law partner owned. The four-year period means the four years prior to a home purchase. The period begins on January 1 of the fourth year before the year you withdraw funds from your RRSP, and ends 31 days before the date you withdraw funds.

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