RRSP Withdrawal for Home Purchase (Home Buyers’ Plan)

Posted on: Thursday, August 30th, 2012

The Home Buyers’ Plan is a plan that allows a home buyer to withdraw funds from most registered retirement savings plans (RRSPs) in order to buy or build a qualifying home either for you, or a relative that has a disability. Some RRSPs that do not allow any withdrawals to be made include some locked-in or group RRSPs, but more information about this matter can be obtained from the individual who issues your RRSP.

In any single calendar year up to a maximum of $25,000 can be withdrawn from the RRSP. You have the option to withdraw a single lump sum or you can make a series of smaller withdrawals throughout the year, as long as the total amount of withdrawals does not exceed the maximum amount of $25.000. It is important to note that before any amount is withdrawn from your RRSP, the RRSP contributions must be in the RRSP for at least 90 days, or else they may not be deductible. Any withdrawals that are made have to be repaid within a period of 15 years, and each year you will have to make a payment until the HBP balance is completely paid off. If you fail to repay an amount in a certain year then the amount will be included in your income for the year in which the withdrawal was made. You should consult with your financial advisor before withdrawing any funds for this purpose.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

You can read this full article in the August 2012 Newsletter by clicking here. If you have any questions about this blog, I invite you to contact me at shari@elliottlawyers.com.

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