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Home Buyers' Plan (HBP) Using An RRSP to Buy A Home

By Mark Fidgett

Mortgage and Lending with Mark Fidgett - www.NotaPennyDown.com

February 19, 2013 10:51 PM

I’ve often blogged about using your RRSP to buy a home.

But here’s a Secret that many don’t know.

Most know that you can withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself and that it requires a repayment of $1,667 every year for 15 years ($25,000/15 years = $1,667). And that any missed repayments are included in your income for that year.

BUT what most don’t know is that you are NOT required to repay the funds back to the same RRSP or institution from which you made your HBP withdrawal.

What that mean is, if you’re already making RRSP contributions through a work-sponsored plan, when you receive your RRSP contribution receipt for deposits made during the year, that work-sponsored contribution receipt can be used to satisfy your HBP repayment requirement and the remainder of the receipt could be applied against your RRSP contribution room.

Example: Let’s say you’re already making a $150 per month work-sponsored contribution which equates to $1,800 for the year and the HBP plan requires a repayment of $1,667 per year, you have more than met your yearly obligation.

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