New 1st Time Buyer Program (RRSP Usage)

New rules enhance the Home Buyer’s Plan program

If you’re a first-time homebuyer, with the federal Home Buyer’s Plan you may be eligible to withdraw funds from your registered retirement savings plan (RRSP) for a down payment when buying or building a qualifying home. Under the program you can now withdraw up to $25,000 without tax penalties, according to measures announced recently in the 2009 Federal Budget.

Here is a basic overview of some of the rules:

  • You must be considered a first time homebuyer, i.e. you cannot have owned an owner occupied home in the previous five years.
  • You must be a Canadian resident.
  • The property purchased must be for a principal residence.
  • The RRSP must be repaid within 15 years, with minimum annual payments of 1/15th of the withdrawn amount.
  • Funds must have remained in your RRSPs for a minimum of 90 days before they can be withdrawn under the Home Buyers Plan.
  • You will have to complete Form T1036, “Home Buyers Plan (HBP) – Request to Withdraw Funds from an RRSP” available at the Canada Revenue Agency website www.cra-arc.gc.ca in the RRSP section.

If you have any questions about this program please feel free to Ryan Roberts. I have a great group of financial advisors and mortgage brokers that can assist your specific needs.


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