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. Lifelong Learning Plan

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

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

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

    The amount that a Canadian taxpayer contributes to his or her ...
  5. Pension Adjustment - PA

    The amount of contributions that can be made to a Registered ...
  6. Mortgage Equity Withdrawal

    The amount of equity that consumers withdraw from their homes ...
Related Articles
  1. Taxes

    RRSPs: Introduction

    This tutorial is your one-stop RRSP shop. Here we explore the ins and outs of RRSP planning and investing. Specifically, we look at what an RRSP is, what its advantages are, how you can set one ...
  2. Taxes

    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. Taxes

    RRSPs: Eligibility

    Who Can Set Up an RRSP? After reading about the tax advantages of RRSPs in the previous section, you may be anxious to know whether you're eligible to invest. The good news is that practically ...
  4. Taxes

    RRSPs: Growth

    The growth of an RRSP is determined by its contents. Simply having money in an RRSP is not a guarantee that you may retire comfortably; however, it is a guarantee that the investments will compound ...
  5. Taxes

    RRSPs: RRIFs

    Once you've retired, getting the money from your RRSP is easy. All you have to do is go to the financial institution that is holding your RRSP account and say that you have retired. Then it's ...
  6. Taxes

    RRSPs: Contributing - Part 2

    Now that we have explored some of the basics of RRSP contributions, let's get into some of the details regarding how a married couple can take full advantage of contribution limits through income ...
  7. Home & Auto

    6 Ways To Come Up With A Down Payment On A Home

    The requirements for making a down payment on a home have changed, but don't worry - there are still plenty of ways to build up that money.
  8. Wealth Management

    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.
  9. 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.
  10. 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.
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. 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 >>
  3. 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 >>
  4. How do you withdraw money from your 401(k)?

    Deciding to take a withdraw from your 401k is not a decision that should be made lightly. However, for those who needs funds, ... Read Answer >>
  5. How and when can you convert a Registered Retirement Savings Plan (RRSP) into a Registered ...

    Discover how and when to convert your Registered Retirement Savings Plan into a Registered Retirement Income Fund, and learn ... Read Answer >>
  6. Can you make tax-free withdrawals from your 401(k)?

    Find out whether you can take withdrawals from your 401(k) tax-free, including how withdrawals from Roth and traditional ... Read Answer >>
Hot Definitions
  1. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  2. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  3. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  4. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  5. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
Trading Center