Jamie Golombek: Here’s how the plan works and how it might be used instead of, or in conjunction with, a TFSA to buy your first home
For years, the Home Buyers’ Plan was the only game in town for the many Canadians who dreamed of saving enough money for a down payment towards a first home or condo. The HBP allows first-time home buyers to withdraw funds from an RRSP to purchase or build a home without having to pay tax on the withdrawal. Amounts withdrawn under the HBP must be repaid to your RRSP over a 15-year period.
With this sudden, renewed interest in the HBP, here’s a quick refresher on how the plan works and how it might be used instead of, or in conjunction with, a TFSA to buy your first home. Assuming you qualify as a first-time home buyer, to withdraw funds from your RRSP without tax, you must first complete Canada Revenue Agency Form T1036 and submit it to your RRSP issuer. In addition, you must have entered into a written agreement to buy or build a qualified home. A qualifying home cannot be owned more than 30 days before you withdraw the funds.
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