How Does The Home Buyers' Plan Work?
Each
purchaser may borrow up to $20,000 from their RRSP under the Home
Buyers’ Plan. (The funds must have been in the RRSP for at least 90
days prior to withdrawal to be eligible under the program)
Provided you buy or build a qualifying home and meet all of the
conditions for making a withdrawal under the Home Buyers’ Plan, you can
use the particular funds you withdrew under the Home Buyers’ Plan for
other purposes. (Not only down payment and closing cost, but for any
other purpose you choose.)
This program is available to the first time home buyer only. (You are
considered a first time home buyer if, at any time during the period
beginning January 1, 1995 and ending 31 days prior to your withdrawal
in 1998, you did not own a home while you occupied it as your principal
place of residence).
This information is current throughout 1999. And the program has been
extended indefinitely.
Repayment of the funds back to your RRSP can be made over 15 years.
(The repayment period starts in 2001 and ends in 2015).
If the amount is not repaid in a year, that year’s repayment amount
will be added to your income and taxed.
In order for the home to qualify it must be located in Canada and
intended to be used as your principal residence.
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