Springtime is house-hunting time! Did you know that the Home Buyer's Plan (HBP) could provide you with some immediate benefits to lessen the burden of buying a house?

The HBP allows you to withdraw up to $20,000 from your RRSP's towards the purchase of a house without immediate tax consequences, as long as you use the correct forms and comply with the rules of the plan.

The money you borrowed from your RRSP must be returned to your RRSP in annual installments over a 15-year period commencing with the second year following the withdrawal. If the amount is not paid back during one of the years, the amount of the repayment for that year will be included in income.

If you have RRSP contribution room and you have money outside of the RRSP that you are saving to use for a down payment, consider putting this money into the RRSP to obtain the tax deduction and then you can withdraw these funds via the HBP. But beware of the $20,000 limitation and a 90-day limitation between payment and withdrawal!

The HBP is no longer limited to a once-in-a-lifetime rule provided there has been a 5-year hiatus in home-ownership before the new withdrawal and all previous balances have been cleared prior to the new withdrawal.

For further information on the HBP or other financial planning matters, please contact your local DJB office.