First-Time Home Buyer Account (HBP)
The First-Time Home Buyer Account (HBP) is a program in Canada that allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) tax-free to use towards the purchase of a qualifying home. The program was introduced by the Canadian government to help make it easier for Canadians to save for their first home.
To be eligible for the HBP, you must be a first-time homebuyer, which means that neither you nor your spouse or common-law partner has owned a home that you occupied as your principal residence in the past five years. You must also have a written agreement to buy or build a qualifying home, which must be located in Canada and must be intended to be your principal residence within one year of buying or building.
If you meet the eligibility requirements, you can withdraw up to $35,000 from your RRSP tax-free under the HBP. However, you must repay the amount withdrawn over a period of up to 15 years, starting the second year after the withdrawal. If you do not repay the amount on time, the amount not repaid will be added to your income for the year and taxed accordingly.
It’s important to note that the HBP is not a grant or a loan, but rather a program that allows you to withdraw money from your RRSP without incurring a tax penalty. It can be a helpful tool for first-time homebuyers to save for a down payment and make homeownership more affordable.
