Ottawa raised the Home Buyers’ Plan limit to $35,000 — here’s how to take advantage of it
A recent change to the Home Buyers’ Plan (HBP) makes it considerably more favorable to potential homebuyers. The change increased the amount homebuyers can withdraw tax-free from their RRSP from $25,000 to $35,000. HBP requires that this withdrawal be repaid within 15 years, and is available only to first-time homebuyers – although a new rule proposes expanding access in 2020 in cases of divorce or separation. The change in the HBP makes it a strong alternative to Tax Free Savings Accounts (TFSA) as a method of paying for a first home, although TFSAs generally remain a better option for lower income earners.
“The HBP got a new lease on life when the federal budget announced the amount that first-time home buyers can withdraw tax-free from their RRSP to buy a first home will be increased immediately to $35,000 from $25,000.”