RRSP Home Buyer’s Plan
The government offers the Home Buyer's Plan (HBP) program which permits home buyers to withdraw up to $25,000 from their Registered Retirement Saving's Plan (RRSP) to use towards buying or constructing a new home.
To access this program, you need to enter into a written agreement that outlines your plans to buy or build a new home. Additionally, you must occupy the new space within a year of purchasing or constructing it.
In order to qualify for the HBP, you must be a first-time buyer. You are not considered a first-time home buyer if you, or you and your spouse, have owned and occupied a home as your principal residence in the past five years.
Once you meet the requirements, you can withdraw up to $25,000 tax-free from your RRSP for a new home. Couples, including common-law partners, can withdraw up to $50,000. These amounts will not be subject to income tax as long as they are repaid into an RRSP in the future.
Existing homeowners can also take advantage of this program to purchase a more accessible home or a home for a dependent relative with a disability who qualifies for the Disability Tax Credit (DTC) and needs a more suitable living space.