Dan Banika
  Re/Max Realty Specialists Inc., Brokerage
Independently Owned and Operated
   
 
dbanika@trebnet.com
905-272-3434
 
 
 
 
 
 
Mortgage Info
 
RRSP Home Buyer’s Plan

The First-time Home Buyer's Plan (HBP) is a Federal Government initiative providing Canadian citizens the opportunity to withdraw up to $25,000 from personal registered retirement savings plans (RRSPs) for buying or building a home in Canada. To qualify, applicants must not have directly, or indirectly, owned a residence within the past five years.

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.

Under the HBP, qualifying withdrawals will not be included in annual income, and RRSP issuers will not withhold income tax from these withdrawn amounts. If you are jointly buying or building a home together with your spouse or other qualifying individual, each of you can withdraw up to $25,000.

To withdraw these funds from your RRSPs, you must first have entered into a written agreement to buy or to build. You will also need to confirm that you will occupy the subject property as your personal residence. (Once you take occupancy there is no minimum period of time you are required to live there.)

Your commitment to the HBP is to repay the amount withdrawn within a 15 year time period. In each year, you will need to make the minimum contributions to your RRSPs equal to 1/15 of the withdrawn funds until the total amount is repaid. You will receive a HBP Statement of Accounts on your annual Notice of Assessment showing you the total HBP withdrawal, the amount you have repaid to date, your HBP balance, and the amount you should repay the following year. Your repayment starts the second year following your withdrawal, and you may repay any amount in excess of the minimum to reduce payments in later years.

read more at: http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

 
 


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Independently Owned and Operated
 
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