In today’s market, finding the funds for a down payment on your first home can be tricky, scary and all together hard to find. That is why the government of Canada started the HBP (Home Buyers Plan) to help younger Canadians find the money for their first down payment and help them enter the real estate market!
The home buyers plan allows first time home buyers to withdraw up to $35,000 from their RRSP savings account to purchase their first home or condo tax free!! Yes you read that correctly, TAX FREE. The funds would only have to be reinvested into your RRSP program over the course of the next 15 years, either evenly distributed or in bulk shots.
Although nothing good in life comes without conditions, the HBP is quite simple to qualify for, the only conditions are as follows:
– Be considered a first time home buyer
– Having a valid promise to purchase accepted on a qualifying home, condo or new construction.
– Must be a Canadian resident when withdrawing the funds.
– You must intend to occupy the property you plan on purchasing (cannot be for rental purposes)
Even though the conditions stipulated above are quite clear, the government does make exceptions on one of the terms and that is, what makes you a “first time” home buyer. If you have not owned a property in the last five years (meaning you sold a property, did not re-purchase, and are now buying a property that qualifies again) you can re-use the program.
For more information on how the HBP works and what advantages it has for you as a buyer, we invite you to contact your mortgage broker!