Thanks for visiting MSH Accounting. We wanted to dedicate our kickoff post about a very helpful plan for first time home buyers in Canada. The Canadian Home Buyer’s Plan.

Individuals can withdraw $25,000 from their RRSP for the purchase of a principal residence, since the amount is per individual a couple may withdraw $25,000 each to purchase a principal residence. This is available to married and common law couples as well as groups of individuals. In order to access the funds tax free you must contact your RRSP provider to properly register the HBP.

Repayment
The RRSP amount is repaid over a (15) fifteen year period starting in the second year after the withdrawal. If the repayments are not made then the amount of the repayment is added to your taxable income.

Tracking
Once implemented CRA will track the amount of the HBP and repayments will include the amounts in your annual Notice of Assessment.

Eligibility
Although the HPB is for first time buyers, the regulations state that someone who has participated in HBP may participate if there has been a period of 5 years non ownership.

The 5 year rule is waived for persons who qualify for the disability credit, where a new home is better suited to the disabled person.

You can read more about the Canadian HBP here.

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