1. What is the Home Buyers’ Plan?
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home for yourself or for a related person with a disability.
2. What is the current maximum amount that can be withdrawn under the HBP?
Currently, the maximum amount that an individual can withdraw in a calendar year from an RRSP to purchase or build a qualifying home without having to pay tax on the withdrawal is $20,000.
3. What is the new maximum amount announced in the 2009 Budget?
For 2009 and subsequent years, for withdrawals made after January 27, 2009, the budget proposes to increase the maximum amount to $25,000.
4. If I withdrew up to $20,000 from my RRSP after December 31, 2008, and before January 28, 2009, can I withdraw additional funds from my RRSP after January 27, 2009?
Yes. You can withdraw additional funds after January 27, 2009, as long as the total of all your withdrawals in 2009 does not exceed the new maximum amount of $25,000. However, under existing requirements neither you nor your spouse or common-law partner can own the qualifying home for more than 30 days before making the final withdrawal in 2009.
5. Is the HBP connected to the new Home Buyers Tax Credit (HBTC)?
No. Although some of the eligibility conditions for the HBP and the HBTC are similar, they are not connected. Participation in the HBP does not affect an individual’s eligibility for the HBTC.
6. Where can I find more information on the HBP?
For more information, please consult RC4135, Home Buyers’ Plan. Taxpayers are encouraged to check our Web site often – all new forms, policies, and guidelines will be posted here as they become available.
SOURCE: Canada Revenue Agency