RRSP - Homebuyers Plan
Tax savings aren't the only reason to invest in an RRSP. With the Federal government's Home Buyers' Plan (HBP), first-time homebuyers have the opportunity to put that tax-free cash towards a new home.
Each individual involved in the purchase of the home may withdraw a maximum of $25,000 from their RRSP -- provided it is the first home for all parties involved. The home must be used as a principle residence, and all funds must be withdrawn from the RRSP within 30 days of the property's closing date.
You have 15 years to repay your RRSP 'loan', and payments must start two years after the initial home purchase. Every year, you will receive a notice of assessment stating the amount you have repaid, your total balance, and the required amount for your next payment.
For more information about the HBP, visit Canada Revenue Agency's website listed under the Resources.
Home Buyers Plan (HBC) - The Home Buyers' Plan (HBP) is a program that allows you to withdraw up to $25,000 (after January 27, 2009), from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability . Click here.
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