|
 |
|
|
 |
 |
 |
|
 |
RRSP Home Buyers' Plan
The Home Buyers' Plan (HBP) is a program under which
you can, generally, withdraw up to $20,000 from your retirement savings
plan (RRSPs) to buy or build a qualifying home. Withdrawals that meet
all applicable HBP conditions do not have to be included in your income,
and your RRSP issuer will not withhold tax on these amounts. However,
before you can withdraw funds you must have entered into a written
agreement to buy or build a qualifying home which you must occupy no
later than one year after buying or building the home.
If you buy the
qualifying home together with your spouse or other individuals, each of
you can withdraw up to $20,000. You cannot withdraw an amount from your
RRSP under the HBP if you or your spouse owned the home more than 30
days before the date of your withdrawal.
Details
- Up to $25,000 per person could be withdrawn tax-free
from RRSPs to buy or build a principal residence. Couples -- including
common-law -- will be able to withdraw up to $50,000.
- You have to meet the first-time buyer's condition.
You are not considered a first-time home buyer if you or your spouse
owned a home that you occupied as your principal place of residence in
the past 5 years. To determine past 5 years, the 4 years preceding the
year you make your withdrawal plus the period in the year you make your
withdrawal ending 31 days before your withdrawal is the rule adopted.
- Home buyers withdrawing funds do not have to pay
income tax on the amount withdrawn, as long as the funds are repaid into
an RRSP in the future.
- The 15-year repayment period will begin in the second
calendar year following the calendar year in which the withdrawal is
made. In addition, a qualifying home must generally be acquired before
October 1 of the calendar year following the year of withdrawal. For
example, those making withdrawals under the plan in 2000 will have until
October 1, 2001 to acquire a qualifying home and their first annual
repayment will be due by the end of 2002 or the first two months of
2003.
- A special rule denies a tax deduction for
contributions to an RRSP that are withdrawn within 90 days of the RRSP
deposit being made. Consequently, to get the normal tax break for a
contribution and to use those funds under the plan, the money must be in
your RRSP for at least 90 days before a withdrawal is made.
You can participate in the HBP more than once if:
- your HBP balance for your previous participation is
zero on January 1 of the year you want your new participation in the HBP
to occur; and
- you meet the first-time buyer's condition and all
other HBP conditions that apply to your situation.
Existing homeowners can use the HBP to
purchase a more accessible home or a home for a disabled dependent relative
where the individual withdrawing the funds:
- qualifies for the disability tax credit (DTC) and is
buying a home that is more accessible for the individual or is better
suited for the care of the individual;
- is related to a disabled individual who qualifies for
the DTC and is buying a home for the benefit of the disabled individual
that is more accessible for, or better suited for, the care of the
disabled individual, or;
- is related to a
disabled individual who qualifies for the DTC and is withdrawing an
amount for the disabled individual to buy a home that is more accessible
for, or better suited for, the care of the disabled individual.
For more information call 1-800-959-8281 or visit
Revenue Canada's web site:
|
|
|
|
|
 |
|
|
