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The House Buyers Plan (HBP)
The H.B.P. is a governmental program by which every qualifying individual can extract up to a maximum of 20 000 $ from his(her) RSSP without any taxes, provided he(she) acquires a property which will become his(her) main residence.
However not all RRSPs can qualify to be used in H.B.P.
When considering H.B.P., the amounts cashed out of the RRSP have to be repaid in their entirety within 15 years maximum.
The first repayment is due after the third civil year following the year of the cash out. Revenue Canada mails you an annual statement. If you do not remit the minimum annual amount, this amount will become a taxable one in your current year's tax declaration.
In order to qualify for this program, you need to comply with the following requirements :
- Not to have owned your main residence for the last 5 years.
- To have signed a purchase offer or a preliminary contract (for a new construction).
- To become the owner before October 1st of the year following the cashing out from the RRSP.
- To have had the RRSP for a minimum of 90 days.
- Not to be living in couple with the owner of the property you currently live in (fiscal contamination by the spouse).
- Having repaid in its entirety the 1st H.B.P. if this is your 2nd H.B.P.
Which properties can qualify :
To qualify, a property must be located in Canada and used as a main residence. It must not have been your own property, or your spouse's, more than 30 days before the cashing out of the RRSP. Finally, you have to occupy the residence as your main lodging location less than one year after its acquisition or its construction.
Types of property which qualify :
- Condominium
- Semi-detached
- Single family dwelling
- Duplex
- Triplex
- Town house
- Mobile house on leased land or not
Contact me for more information on H.B.P.
Source: Multi-Prets.com
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