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What is the Federal Home Buyer's Plan?

Blog by Diane Cardoso | June 20th, 2011

The Federal Government Home Buyer's Plan (HBP) is available to first time home buyers and a few others. The plan was established in 1992 to allow first time home buyers to draw up to $25,000 from their RRSP's, tax free as a downpayment. Couples can use up to $50,000. To qualify, a) you must not have owned a home in the past 5 years, b) you must use the home as your primary residence, c) repay the RRSP within 15 years with minimum annual payments of 1/15th of the withdrawn amount starting the 2nd year after the funds are withdrawn.  You can use the plan more than once providing the previous RRSP withdrawal has been fully repaid by the beginning of the year in which they choose to reapply.
Disabled persons can also participate more than once if they are buying or building a more accessible home.  You cannot use the HBP if you are a 'trade-up' buyer.  For further information on how the HBP can help you purchase your home, speak with Diane or your mortgage broker/banker.