Government Home Ownership Incentives

The RRSP Home Buyers' Plan

If you are eligible, the RRSP Home Buyers’ Plan (HBP) allows you as an invidivual to withdraw up to $25,000 (or up to $50,000 per couple) from your RRSP to help you purchase or build a house. Briefly, here's how the plan works:

  • To be eligible, you (or your spouse) cannot have owned a home that you used as your main residence within the previous four years.
  • You must agree in writing to buy or build a home.
  • You must be a resident of Canada.
  • If you and your spouse are eligible, you can each withdraw up to $25,000 - for a total of $50,000 - towards the down payment.
  • The money you are taking out of your RRSP must have been in the account for a minimum of 90 days before it qualifies.
  • If you have used the Home Buyers' Plan before, you cannot have any outstanding balance due.
  • The prospective home must be in Canada, and it must be intended for use as your principal place of residence within one year of buying or building it.
  • The money you withdraw must be repaid within 15 years, and you must pay back a minimum of 1/15th each year. If you miss a repayment, the amount must be reported as income on your tax return for that year.
  • To make a repayment under the HBP, you must contribute to your RRSP in the year the repayment is due or in the first 60 days of the following year. Repayments begin the year after the one in which you made your withdrawal.

Visit the Canada Revenue Agency website for more information.

First-Time Home Buyers' (FTHB) Tax Credit

The First-Time Home Buyers' Tax credit was introduced as part of Canada's Economic Action Plan to assist Canadians in purchasing their first home. The credit is designed to help recover closing costs, such as legal expenses, inspections, and land transfer taxes, so you can save more money for a down payment.

  • At current taxation rates, the FTHB credit works out to a rebate of $750 for all first-time buyers. After you buy your first home, the credit must be claimed within the year of purchase, and is non-refundable. In addition, the home you buy must qualify. If you are buying a home with a spouse, partner or friend, the combined claim cannot exceed $750. Visit www.cra-arc.gc.ca and www.fin.gc.ca for additional information.