The home buyers’ plan (HBP) helps eligible home buyers save for a down payment by allowing them to withdraw up to $35,000 from a registered retirement savings plan (RRSP) to purchase or build their first home, or a home for a specified disabled individual, without having to pay tax on the withdrawal.
While no tax is payable on such withdrawals, the amounts withdrawn must be repaid to the RRSP over the subsequent 15 years. Otherwise, amounts due for repayment within a specific year are taxable as income for that year.
The 2024 Federal Budget proposes to increase the amount of an eligible withdrawal from an RRSP from $35,000 to $60,000. The change would be effective for withdrawals made after the budget date of April 16, 2024.
The 2024 Federal Budget also proposes to temporarily defer the start of the 15-year repayment period by an additional three years for participants making a first withdrawal between January 1, 2022, and December 31, 2025. Accordingly, the 15-year repayment period would start the fifth year following the year in which a first withdrawal was made.
If you would like help with dealing with the CRA or would like to know more about taxable benefits, please feel free to call us at (905) 305-9722 or email us at info@eigenmachtcrackower.com and we will help you out!
