The RRSP Home Buyers' Plan allows
participants to withdraw $20,000 from their RRSPs to purchase
or build a house. No income tax is deducted as long as these funds
are repaid to the RRSP according to the government's repayment
schedule. Each spouse may withdraw $20,000 from his or her RRSP.
Who can participate?
You may participate if you are a
resident of Canada and if you (or your spouse) are considered
a first-time home buyer. A first-time home buyer cannot have owned
a home while occupying it as a principal residence in the current
year or the previous four years. You must have entered into a
written agreement to buy or build a qualifying home.
As of January 1, 1999, you may participate
in the plan more than once, provided that neither you nor your
spouse have owned or lived in a house as your principal residence
within the specified period and providing your previous plan withdrawal
has been repaid. If you have a locked-in RRSP, consult your RRSP
issuer for information about eligibility.
To qualify for the Plan, your home must
be:
- located in Canada
- acquired not more than 30 days before receiving
the withdrawal under the Plan
- occupied as your principal residence within
one year after buying or building it
- one of the following:
- detached or semi-detached home
- townhouse
- mobile home
- condominium unit
- apartment in a duplex, triplex, fourplex
or apartment building
- a share in a cooperative housing corporation
that gives you an equity interest in a housing unit.
Repayment Schedule
The money withdrawn from your RRSP
must be repaid over a period of no more than 15 years. You must
begin payments by at least the second year after funds were withdrawn.
Each year, you must repay 1/15 of the total
amount you withdrew. If you repay more, the amount in subsequent
years will be reduced. If you repay less, the amount you did not
pay will be considered income and will be taxed. Certain contributions,
such as pension funds, cannot be considered as repayment.
For further information:
Call, write or visit the General Enquiries
service of your local Canada Customs and Revenue Agency office.
Prepared by the Alberta Real
Estate Association
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