9 Things You Should Know About the Home Buyers’ Plan

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 from your Registered Retirement Savings Plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.The one thing to keep in mind is that the HBP comes with several strings attached. Break them, and you will face financial penalties, so here are nine things every first-time home buyer in Canada must know.
1. The HBP is geared to first-time home buyers
2. You need an existing Retirement Savings Plan to play
3. The money needs to be present in your RRSP account for a period of time
4. $25,000 is the limit…but is it?
5. You’re not going anywhere without a written agreement.
6. You will need to fill out and forward Form T1036 to make a withdrawal.
7. You cannot use the HBP to fund an investment property
8. You need to pay this money back into your RRSP in a specified amount of time.
9. Be prepared to demonstrate compliance.