Home Buyers’ Plan threshold increased (Jan 27th 2009 new rule in effect)
The budget increases the amount that first-time home buyers can withdraw tax-free from a Registered Retirement Savings Plan (RRSP) to purchase or build a new home to $25,000 (up from $20,000). The new limit applies to withdrawals made after January 27, 2009.
As a first time homebuyer, you are allowed to withdraw up to $20,000 from your RRSP without penalty. This amount can be doubled with your partner to a total of $40,000. RRSP Homebuyers plan must be repaid over a period of 15 years. Participants of the Homebuyers plan must begin repayment to their RRSP within two years of withdrawing the funds and amounts must be repaid within 15 years.
For more information, talk to your mortgage professional or visit:
Canada Revenue Agency http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html
Service Canada http://www1.servicecanada.gc.ca/en/goc/home_buyers_plan.shtml
Filed under: FAQ, First Time Home Buyers
