What Is The First Time Home Buyer’s Plan?
If you are planning on buying or building your first home and you want to use money from your Registered Retirement Savings Plan (RRSP) to use for your down payment and other house expenses, instead of making a regular withdrawal and facing the tax consequences, you can take advantage of the First Time Home Buyer’s Plan (HBP). When you take advantage of the HBP, what you are essentially doing is borrowing money from yourself that will eventually need to be paid back into your RRSP.
Who is eligible?
In order to be eligible, you must enter into a written agreement to buy or build a home. The home must be your principal place of residence, and you must be a Canadian resident. The most you can withdraw is $25,000, and you can either withdraw it all at once, or you can make a series of withdrawals throughout the same year. If you plan on buying a house with your spouse, your spouse can also take advantage of the HBP.