Home Buyers' Plan - HBP

DEFINITION of 'Home Buyers' Plan - HBP'

A program in Canada that allows RRSP holders to withdraw up to $25,000 from their plan to buy or build a home for themselves. The major benefit of the Home Buyer's Plan (HBP) is that you are allowed to withdraw the funds tax free as long as they are used to buy/build your first home.

BREAKING DOWN 'Home Buyers' Plan - HBP'

You are given 15 years after the second year of withdrawal to pay the money back into your RRSP. The amount you have to pay back per year is 1/15th of the total amount you took out of your RRSP. Failure to pay back the funds may result in having to declare the funds you withdrew as part of your income. For more information on the HBP, contact the Canada Revenue Agency or visit their website.

RELATED TERMS
  1. Self-Directed RRSP

    A type of RRSP (Registered Retirement Savings Plan) whose owner ...
  2. Registered Retirement Savings Plan ...

    A legal trust registered with the Canada Revenue Agency and used ...
  3. Lifelong Learning Plan

    A provision applicable to the Canadian Registered Retirement ...
  4. Registered Retirement Savings Plan ...

    Assets invested in an RRSP. RRSP contributions can be made at ...
  5. Registered Retirement Savings Plan ...

    The maximum amount that the Canada Revenue Agency (CRA) allows ...
  6. Registered Retirement Savings Plan ...

    The amount that a Canadian taxpayer contributes to his or her ...
Related Articles
  1. Retirement

    Maxing Out Your RRSP (Canadian)

    Increasing your savings will provide tax benefits - and peace of mind.
  2. Retirement

    Registered Retirement Savings Plans (RRSP)

    Learn how the Canadian government makes saving for your post-work years easy. We take you from your first contribution to your first withdrawal.
  3. Personal Finance

    Canadians: Smart Ways To Use Your Tax Refund

    Taxes are an annoying annual chore akin to going to the dentist. Luckily, however, some of us get a nice tax refund after the process. It's important to use this refund wisely though, and Canadians ...
  4. Managing Wealth

    Buying a House Before Selling Your Own: Risks and Considerations

    Learn more about the financial risks and worst case scenarios associated with buying a home before selling your current residence.
  5. Retirement

    How Are 401(k) Withdrawals Taxed for Nonresidents?

    As a U.S. nonresident, deciding what to do with your 401(k) after you return home comes down to which tax penalties, if any, you're willing to incur.
  6. Retirement

    What's The Difference Between Retiring In Canada And America?

    American and Canadian governments provide many of the same types of services, but the subtle differences between the two countries are worth noting.
  7. Retirement

    Your 401(k): Not the Best Emergency Fund

    If you have an emergency and need to access your retirement funds, you may have to pay a penalty if you dip into your 401(k). But there is a better option.
  8. Personal Finance

    6 Tips For Selling Your Home Fast

    Find out what you can do to stand out from the competition and make your home an easy sell.
  9. Retirement

    When Paying Off Debt With Your 401(K) Makes Sense

    The experts warn against touching your retirement savings early, but there are situations where it is the best financial decision.
  10. Retirement

    What’s the Best Retirement Drawdown Strategy?

    Retiring soon? The challenge now is to figure out how to make your nest egg last for the rest of your life.
RELATED FAQS
  1. How does a Registered Retirement Savings Plan (RRSP) loan work?

    Discover some of the most common and useful ways to take out a loan from your Registered Retirement Savings Plan without ... Read Answer >>
  2. Should a Canadian citizen who lives and works in the U.S. continue to contribute ...

    No, a U.S. resident should not contribute to a RRSP account. RRSP contribution rules allow you to contribute a certain percentage ... Read Answer >>
  3. What are the penalties for early withdrawal from a Registered Retirement Savings ...

    Learn about the three major penalties associated with making an early withdraw from your Registered Retirement Savings Plan ... Read Answer >>
  4. When can you withdraw your savings from a Registered Retirement Savings Plan (RRSP)?

    Learn the standard age for withdrawing savings from a Registered Retirement Savings Plan (RSSP) and what you can expect if ... Read Answer >>
  5. Is a Registered Retirement Savings Plan (RRSP) taxable in the U.S.?

    Learn how the IRS treats Canadian Registered Retirement Savings Plans that are held by U.S. citizens or residents, and discover ... Read Answer >>
  6. What are the main reasons to obtain a Registered Retirement Savings Plan (RRSP)?

    Learn about some of the major benefits of opening and contributing to a Registered Retirement Savings Plan throughout your ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center