Home Buyers' Plan - HBP
What is '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.