Are you looking to buy your first home? If so, you may be wondering about the first time home buyers plan. This is a government program that offers tax breaks to first time home buyers. In this blog post, we will discuss everything you need to know about the first time home buyers plan. We will cover how it works, who is eligible for it, and what you need to do in order to take advantage of it!
The First Time Home Buyers Plan: Everything You Need to Know
Basically, it is a government program that allows you to withdraw up to $35,000 from your RRSP as a downpayment on your first home. In order to be eligible for this program, you must meet a few criteria. First of all, you must be a first time home buyer. This means that you cannot have owned a home in the past five years. Additionally, you must be planning on living in the home as your primary residence. Lastly, you must be a Canadian citizen or permanent resident.
If you meet all of these criteria
If you meet all of these criteria, then you can begin taking advantage of the first time home buyers plan! Essentially, what this entails is withdrawing up to $35,000 from your RRSP in order to put towards your downpayment. Additionally, you will not have to pay any taxes on this money when you withdraw it.
This is a great way to save up for a downpayment, as you will not have to pay any taxes on the money that you withdraw.
Repayment Requirements
The Home Buyers’ Plan is a loan from yourself, and like all loans, you have to pay it back. Two years after you withdraw money from your RRSP under the Home Buyers’ Plan, you must start repaying your loan to yourself. You have 15 years to pay back the loan. For example, if you borrowed $35,000 under the Home Buyers’ Plan in 2020, then in 2022 you would have to start repaying your RRSP at a rate of at least $2,333 per year.
Thanks for reading and good luck with your home buying journey! For more information head to the Canada.ca website.
If this blog post has helped you understand the Home Buyers Plan a little better or if you have any questions, please leave us a comment down below! We would love to hear from you! And remember, Homebuyers’ Plan (HBP) is a great program offered by the Canadian government to help make buying your first home more affordable. If you are thinking about taking advantage of the Home Buyers Plan, be sure to speak to a financial advisor to ensure that it is the best decision for you. Thanks for reading!
