What is the Home Buyers’ Plan (HBP)?

The HBP is a program that allows you to withdraw up to $20,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home.

The home can be for you, or it can be for a related person with a disability. If the home is acquired by a person with a disability or for a related person with a disability, one of the following should apply:

• it is more accessible to that person than his or her current home; or
• it is better suited to that person's needs.

As an HBP participant, you can acquire the home for the related person with a disability, or you can provide the withdrawn funds to the related person with a disability to acquire the home.

You do not have to include eligible withdrawals in your income, and your RRSP issuer will not withhold tax on these amounts. You can withdraw a single amount or make a series of withdrawals throughout the same calendar year, provided the total of your withdrawals is not more than $20,000. If you buy the qualifying home with your spouse or common-law partner, or with other individuals, each of you can withdraw up to $20,000.
Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included in your income for that year.

Can a withdrawal be made from any RRSP?

You (the participant) can only withdraw funds from an RRSP under which you are the annuitant. In the case of spousal or common-law partner RRSPs, the annuitant is the person who will receive benefits from the plan. For example, if your spouse or common-law partner contributed to your RRSP, you are the annuitant of the RRSP, or if you contributed to your spouse's or common-law partner's RRSP, that individual is the annuitant of the RRSP. For more information about spousal or common-law partner RRSPs, see Guide T4040, RRSPs and Other Registered Plans for Retirement.

Some RRSPs, such as locked-in or group RRSPs, do not allow you to withdraw funds from them. Your RRSP issuer can give you more information about the types of RRSPs that you have and whether or not withdrawals can be made from these plans to participate in the HBP.

Note: If you or your spouse or common-law partner withdraws an amount from an RRSP to which you or your spouse or common-law partner had made contributions during the 89-day period just before the withdrawal, you may not be able to deduct part or all of these contributions for any year.

What are the conditions for participating in the HBP?

A number of conditions have to be met in order to participate in the HBP. While some conditions have to be met before you can withdraw funds from your RRSPs, others apply when or after you receive the funds.

Generally, if you participate in the HBP, you have to meet all the HBP conditions yourself. However, depending on your situation, some conditions may apply to another person. For example, if you withdraw funds from your RRSPs to buy or build a qualifying home for a related person with a disability, or to help a related person with a disability buy or build a qualifying home, some conditions have to be met by that person. Regardless of the situation, you are responsible for making sure that all applicable HBP conditions are met. If at any time during your participation period a condition is not met, your withdrawal will not be considered an eligible withdrawal and it will have to be included in income for the year it is received. The following chart lists all the HBP conditions, and who has to meet them in different situations. We explain each condition in the following chart.

Conditions for participating in the HBP:

You have to enter into a written agreement to buy or build a qualifying home

To withdraw funds from your RRSPs under the HBP, when you are buying or building a qualifying home for yourself or a related person with a disability, you must first have entered into a written agreement to buy or build a qualifying home. Obtaining a pre-approved mortgage does not satisfy this condition.

Note: If you are withdrawing funds from your RRSPs to help a related person with a disability who is buying or building a qualifying home, it is the related person with a disability who must have entered into such an agreement.

You have to intend to occupy the qualifying home as your principal place of residence

When you withdraw funds from your RRSPs under the HBP, you have to intend to occupy the qualifying home as your principal place of residence no later than one year after buying or building it. Once you occupy the home, there is no minimum period of time in which you have to live there.

In some cases, you may not occupy the qualifying home by the end of the 12-month period after you bought or built it. If this happens to you, we still consider you a participant in the HBP because you intended to occupy the home as your principal place of residence no later than one year after buying or building it.

Note: If you are withdrawing funds from your RRSPs to buy or build a qualifying home for a related person with a disability or to help a related person with a disability buy or build a qualifying home, you must intend that the related person with a disability meet this condition.

You have to be considered a first-time home buyer

Generally, before you can withdraw funds from your RRSPs to buy or build a qualifying home, you have to meet the first-time home buyer's condition. If you are a person with a disability, or you are acquiring a home for a related person with a disability or helping such a person acquire a home, you may not have to meet this condition.

You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.

If at the time of the withdrawal you have a spouse or common-law partner, it is possible that only one of you will be considered a first-time home buyer

Exception to the first-time home buyer's condition 

You do not have to meet the first-time home buyer's condition to participate in the HBP if any of the following situations applies to you:

• you are a person with a disability and you withdraw funds from your RRSPs under the HBP to acquire a home that is more accessible, or better suited to your needs;
• you withdraw funds from your RRSPs under the HBP to acquire a home for a person with a disability related to you by blood, marriage, common-law partnership or adoption, and the home is more accessible or better suited to the needs of that person; or
• you withdraw funds from your RRSPs under the HBP and give those funds to a person with a disability related to you by blood, marriage, common-law partnership or adoption, to acquire a home that is more accessible, or better suited to the needs of that person.

Note: If any of the above exceptions do not apply, you have to meet the first-time home buyer's condition at the time you make a withdrawal from your RRSPs under the HBP. If this condition is not met at the time of the withdrawal, the amount will have to be included in your income.

For more information...

Home Buyers’ Plan
http://www.cra-arc.gc.ca/tax/individuals/topics/rrsp/hbp/menu-e.html

GST/HST New Home Rebate
http://www.cra-arc.gc.ca/tax/business/segments/construction/builders-e.html