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  • The RRSP must be repaid within 15 years, with minimum annual payments of 1/15th of the withdrawn amount.
  • Funds must have remained in your RRSPs for a minimum of 90 days before they can be withdrawn under the Home Buyers Plan.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 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.

Leave a Reply

Your email address will not be published. Required fields are marked *