Tax Info RRSP increase questions

Home Buyers' Plan (HBP)
Provided you buy or build a qualifying home and meet all of the conditions for making a withdrawal under the Home Buyers’ Plan, you can use the particular funds you withdrew under the Home Buyers’ Plan for other purposes. (Not only down payment and closing cost, but for any other purpose you choose.)
For more information on how the Home Buyers' Plan (HBP) works?

1. What is the Home Buyers' Plan?

The Home Buyers' Plan (HBP) is a program that allows you to withdraw funds from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home for yourself or for a related person with a disability.

2. What is the current maximum amount that can be withdrawn under the HBP?

Currently, the maximum amount that an individual can withdraw in a calendar year from an RRSP to purchase or build a qualifying home without having to pay tax on the withdrawal is $20,000. (see below for increase info)

3. What is the new maximum amount announced in the 2009 Budget?

For 2009 and subsequent years, for withdrawals made after January 27, 2009, the budget proposes to increase the maximum amount to $25,000.

4. If I withdrew up to $20,000 from my RRSP after December 31, 2008, and before January 28, 2009, can I withdraw additional funds from my RRSP after January 27, 2009?

Yes. You can withdraw additional funds after January 27, 2009, as long as the total of all your withdrawals in 2009 does not exceed the new maximum amount of $25,000. However, under existing requirements neither you nor your spouse or common-law partner can own the qualifying home for more than 30 days before making the final withdrawal in 2009.

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5. Is the HBP connected to the new Home Buyers Tax Credit (HBTC)?

No. Although some of the eligibility conditions for the HBP and the HBTC are similar, they are not connected. Participation in the HBP does not affect an individual's eligibility for the HBTC.

6. Where can I find more information on the HBP?

For more information, please consult RC4135, Home Buyers' Plan . Taxpayers are encouraged to check our Web site often - all new forms, policies, and guidelines will be posted here as they become available.

Documents are also available immediately at Department of Finance's Budget 2009 .

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Additonal Information on the Home Buyers' Plan (HBP)
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Information is made available to you as self-help tools for your independent use and is not intended to provide definitive advice. We can not and do not guarantee their applicability or accuracy in regards to your individual circumstances. We encourage you to seek personalized advice from qualified tax professional or the Canada Revenue Agency Website. E.& O.E.