The Home Buyers’ Plan – A Great Incentive Program

What is the HBP?

The HBP is a program that allows you to withdraw funds from your registered retirement savings plans (RRSPs) to buy or build a qualifying home. You can withdraw up to $25,000 in a calendar year

The home can be for you, or it can be for a related person with a disability. If the home is acquired by a person with a disability or for a related person with a disability, one of the following should apply:

  • it is more accessible to that person than his or her current home; or
  • it is better suited to that person’s needs.

As an HBP participant, you can acquire the home for the related person with a disability, or you can provide the withdrawn funds to the related person with a disability to help them acquire the home.

You do not have to include eligible withdrawals in your income, and your RRSP issuer will not withhold tax on these amounts. You can withdraw a single amount or make a series of withdrawals throughout the same calendar year, provided the total of your withdrawals is not more than $25,000. If you buy the qualifying home with your spouse or common-law partner, or with other individuals, each of you can withdraw up to $25,000.

Note
Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP. If they do not, you might not be able to deduct all or part of the contributions you made during this period. For more information, see Your RRSP deduction may be affected by your participation in the HBP.

Generally, you have to repay all withdrawals to your RRSPs within a period of 15 years. During this repayment period, you must file a return and 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. For more information, see You have to file an income tax return.

Note
Situations may arise where the repayments may have to be made in less than 15 years. These situations are explained in Special repayment situations.

Can a withdrawal be made from any RRSP?

You (the participant) can only withdraw funds from an RRSP under which you are the annuitant. In the case of spousal or common-law partner RRSPs, the annuitant is the person who will receive benefits from the plan. For more information about spousal or common-law partner RRSPs, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Some RRSPs, such as locked-in or group RRSPs, do not allow you to withdraw funds from them. Your RRSP issuer can give you more information about the types of RRSPs that you have and whether or not withdrawals can be made from these plans to participate in the HBP.

Note
If you or your spouse or common-law partner withdraws an amount from an RRSP to which you or your spouse or common-law partner had made contributions during the 89-day period just before the withdrawal, you may not be able to deduct part or all of these contributions for any year. For more information, see How to make an HBP withdrawal.

What are the conditions for participating in the HBP?

A number of conditions have to be met in order to participate in the HBP. While some conditions have to be met before you can withdraw funds from your RRSPs, others apply when or after you receive the funds.

Generally, if you participate in the HBP, you have to meet all the HBP conditions yourself. However, depending on your situation, some conditions may apply to another person. For example, if you withdraw funds from your RRSPs to buy or build a qualifying home for a related person with a disability, or to help a related person with a disability buy or build a qualifying home, some conditions have to be met by that person.

Regardless of the situation, you are responsible for making sure that all applicable HBP conditions are met. If at any time during your participation period a condition is not met, your withdrawal will not be considered an eligible withdrawal and it will have to be included in your income for the year it is received.

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For more information, please contact: Gino Pezzani

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