the Wealthy Canadian

How Can I Take Advantage of the Home Buyer’s Plan?

If you’re looking into building or buying your first home and find you don’t have the money necessary for a down payment, you still may have some buying power, that is if you hold RRSPs. According to the Canada Revenue Agency, you may possess the ability of accessing up to $20,000 of your current RRSP holdings without incurring taxes and/or penalties.

Canada Revenue Agency makes this option available to first time homebuyers, as well as to those wishing to buy or build a home for a disabled relative. If your RRSP portfolio is considered to be unlocked, you may be a contender for this program. However, as an applicant, you must meet a few requirements first.

You must have what is considered to be a written agreement for sale between yourself, the contractor, seller or realtor. Please note that having a pre-approved mortgage is not considered a fulfillment of this requirement.

Next, this house must be your principle place of residence and one that neither you nor your spouse/partner may have owned for more than 30 days before your HBP withdrawal request.

To take advantage of this option, you must also be a resident of Canada and have not withdrawn any HBP funding since January 1^st of the year in which you are making the request. Once obtaining your funds, you must buy or build your residence by October 1^st of the year that you made the withdrawal.

There are further clarifications in regards to the HBP option that you can access along with the application form at the Canada Revenue Agency website.