A valuable incentive that home buyers can take advantage of is the Government’s Home Buyers’ Plan (HBP). In my experience, however, there is some confusion surrounding this program, and so I’d like to take this opportunity to provide you with a clear, simple overview.
The HBP allows would-be home buyers the opportunity to withdraw up to $25,000 from their RRSP without incurring any withholding or income tax, and use it towards a home. The amount withdrawn then needs to be paid back into an RRSP over a 15 year period, with equal amounts due each year (i.e. 1/15th).
However, not all homes qualify for the HCP program. The home must be in Canada, it must be a principal place of residence, and it must be purchased or built by October 1st of the year…
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