RRSP Home Buyer Withdrawal Program

QUICK FACTS

• Under Revenue Canada's Home Buyer Withdrawal (HBP) Program, first-time home buyers may withdraw up to $20,000 from their registered retirement savings plans (RRSP), once they have entered into a firm agreement to purchase a home.
• Qualifying HBP withdrawals must be on deposit for greater than 89 days.
• Couples may withdraw up to $40,000, collectively, from their RRSP's.
• RRSP HBP withdrawals are tax free loans repayable in 15 equal installments over the next 15 years back into the participant's RRSP.
• RRSP deposits will lower the depositor's taxable income, dollar for dollar.
• First-time home buyers may withdraw from their RRSP under the HBP up to 30 days after they take possession of their home.
• First-time home buyers with a closing date greater than 61 days require no existing RSP's to qualify. Some Lender's will approve a loan for the purpose of depositing into a RRSP. Usually no payment is required for 90 days. On the 90th day, first-time home buyers may withdraw from their RRSP under the HBP. There is usually a nominal fee due at that time.
• RSP deposits generate tax savings proportional to the taxpayer's marginal tax rate. These tax savings can result in significant tax refunds.

DETERMINING IF YOU ARE CONSIDERED A FIRST-TIME HOME BUYER

Step 1  Did you at any time during the period beginning January 1 or the fourth year before the year of withdrawal and ending 31 days before the withdrawal own a home that you occupied as your principal place of residence?

If Yes, then you are not considered a first-time home buyer.

If No, go to Step 2.

Step 2  Do you have a spouse?

If Yes, go to Step 3

If No, then you are considered a first-time home buyer.

Step 3  Did your spouse have an owner-occupied home at any time during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before the withdrawal that you occupied with your spouse while you were living together as spouses?

If Yes, you are not considered a first-time home buyer.

If No, then you are considered a first-time home buyer.