(Tuula & Guy Perreault)
Buying a Home
It's time to expand the scope of the Home Buyers' Plan
Did you know the Home Buyers' Plan (HBP) is available only to first-time home buyers and a few others?
This federal government program, established in 1992, lets a qualifying first-time home buyer use up to $25,000 from their RRSP's tax-free as a downpayment. Couples can use up to $50,000.
To qualify, the home buyer must:
- not have owned a home within the past five years;
- use the home as their primary residence; and
- repay their RRSP within 15 years with minimum
annual payments of 1/15th of the withdrawn amount starting the second year after they withdrew funds
Can previous participants use the HBP more than once?
Until 1999, only first-time buyers could use the HBP. However, the rules changed and qualifying previous participants could again use the program. To participate the second time, home buyers must have fully repaid the balance from their previous RRSP withdrawl by the beginning of the year in which they chose to reapply.
Disabled persons can also participate more than once if they're buying or building a more accessible home.
Facts and Figures
- The Home Buyers' Plan has helped two million Canadians since its introduction in 1992.
- In the 2009 tax year, there were 854,710 participants in the Home Buyers' Plan cumulatively. Of those, 92,380 were from British Columbia.
- In 2009 alone, 11,790 people in British Columbia used the Home Buyers' Plan to purchase 5,895 homes, withdrawing a total of $151,662,000 from their RRSPs; money that would have otherwise been borrowed from a financial institution.
Source: Canadian Real Estate Association and Statistics Canada