What exactly is the HPB?
What exactly is the HBP?
The HBP (Home Buyer’s Plan) is a program that allows you to withdraw funds from your registered retirement savings plans (RRSPs) to buy your first home.
You can withdraw up to $25,000 from your RRSP. Two people are buying the home? Then each person can withdraw this amount for a maximum of $50,000.
The homes that qualify for the program are single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings.
To be eligible for the HBP, you must meet certain conditions:
- Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them;
- You must be a first-time home buyer and must intend to occupy the qualifying home;
- You cannot own the qualifying house for more than 30 days before the withdrawal is made;
- You must enter into a written agreement to buy the qualifying home when you do the withdrawal;
- If you have previously participated in the HBP, you may be able to do so again if your HBP balance is zero on January 1 of the year during which you plan on making another HBP withdrawal.
Once you know all the conditions are met, forms have to be completed and the HBP process is relatively simple.
In other words, the HBP is as if you’re making a loan to yourself. And so you must pay your debt! You must reimburse yourself on a period of no more than 15 years (1/15 of the total amount per year).
The good news is you do not have to start repaying right away after you take possession of your home. Your repayment period usually starts the second year following the year you made your withdrawals, depending on the date of your withdrawal.
For more information on the HBP, you can look at the brochure from L’Autorité des Marchés Financiers at: https://www.lautorite.qc.ca/en/hbp.html
Ready to buy a condo? Come and see our models and meet our amazing team: Sébastien, Karen and Natalia at 1040 Wellington St (corner of Peel) or contact them by phone at 514-914-4743!