A guide for home buyers

Chapter 11 – BC Home Buyer’s Plan

The Home Buyers’ Plan (HBP) is a first time home buyer program that allows you to withdraw up to $35,000 from your RRSP for a down payment.

Conditions for participating in the HBP

Only the individual who is entitled to receive payments from the RRSP can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the owner of each RRSP. Your RRSP issuer will not withhold tax on these amounts.

Generally, you will not be allowed to withdraw funds from a locked-in RRSP.

To participate in the HBP, ONE of the following conditions must apply:

  • You are withdrawing funds to buy or build a home for yourself as a first-time home buyer
  • You are withdrawing funds to buy or build a home for a person with a disability

In addition, ALL of the following conditions must apply:

  • You must enter into a written agreement (Offer of purchase) to buy or build a qualifying home. The agreement may be with a builder or contractor, or with a realtor or private seller. Obtaining a pre-approved mortgage does not satisfy this condition.
  • You intend to occupy the qualifying home as your principal place of residence
  • Your repayable HBP balance on January 1 of the year of the withdrawal is zero
  • Neither you nor your spouse or common-law partner owns the qualifying home more than 30 days before the withdrawal.
  • You are a resident of Canada.
  • You buy or build the qualifying home before October 1 of the year after the year of withdrawal.

You are responsible for making sure that all HBP conditions that apply to your situation are met.

If a condition is not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. You will have to include the RRSP withdrawal as income on your income tax return for the year you received the funds.

If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate at a later date.

You have up to 15 years to repay the amount that you withdrew under the HBP. Generally, for each year of your repayment period, you have to repay 1/15 of the total amount you withdrew until the full amount is repaid to your RRSPs.