The RRSP (Registered Retirement Savings Plan) Home Buyers' Plan is a government of Canada plan for allowing Canadians to withdraw money, tax free, from their retirement savings plans.

Formerly restricted to first-time home owners, in 1999 the federal government opened this plan up to some previous home owners, as well as first-time home owners.  

The Home Buyers' Plan is a program that allows you to withdraw up to $20,000 from your registered retirement savings plans (RRSPs') to buy or build a qualifying home for yourself. You can withdraw a single amount or make a series of withdrawals throughout the same year, provided the total of your withdrawals is not more than $20,000 If you buy the qualifying home together with your spouse or other individuals, each person who qualifies can withdraw up to $20,000.  

IMPORTANT NOTE:
If you made a contribution to an RRSP during the 89-day period just before your withdrawal from your RRSP, you will not be able to deduct the contribution you made from your taxes.

RRSP WITHDRAWALS ARE NOT INCLUDED AS INCOME...Under the Home Buyers' Plan you do not have to include eligible withdrawals as income on your income tax return, and your RRSP issuer will not withhold tax on these amounts.

IF YOU WITHDRAW MORE THAN $20,000...If the total of your RRSP withdrawals under the Home Buyers' Plan is more than $20,000, you will have to include the excess amount as income on your tax return for the year you receive it.

YOU MUST USE THE MONEY BEFORE...Generally, if you participate in the Home Buyers' Plan in a particular year, you have to buy or build the qualifying home before October 1 of the year following the year of withdrawal. If you are building a qualifying home, Revenue Canada considers you to have 'built the home' on the date it becomes habitable.

IF YOU DO NOT USE THE MONEY...If you do not buy or build the qualifying home before October 1 of the year after the year of withdrawal, you can:

·         cancel your participation in the Home Buyers' Plan and return the money to an RRSP
      OR

·         buy or build a different home, called a replacement property, before October 1 of the year following the year of withdrawal.

YOU MUST REPAY WITHIN...You must repay all withdrawals to your RRSPs within a period of no more than 15 years. Generally, you will have to repay an amount to your RRSPs each year until you have repaid the total you withdrew. If you do not repay the amount due in a year, you will need to include the amount as income on your tax return for that year.  

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