Mortgage Blog
Home buyers Plan (first time home buyer)
April 23, 2024 | Posted by: Sarabjit Dhuna
Federal government announced that from 16th April 2024, first-time home buyer can withdraw up to $60K (previously $35K) without any tax penalties and those who withdraw between Jan.1 and dec 31 2025, They will have 5 years to restart payments (previously it was 2 years). You will have to repay the amount in 15 years period of time.
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RRSP (registered retirement saving plan) can help you to deposit 20% down payment of your home and helps to avoid mortgage insurance. If you pay less than 20% then you have to pay mortgage insurance. It is a good idea to invest more in down payment so you don't have to borrow more money and you will pay less monthly or bi-weekly mortgage payment.
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If you have funds in FHSA (First Home Saving Account) then you can withdraw up to 40,000 amounts without paying any amount back. All 40,000 amount would be tax free. You can read more about FHSA on my blog.
Rules to qualify for (HBP) Home buyers Plan: -
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You must be Canadian residents.
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You must be considered as First-time home buyers as per government rules.
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You need to have a written agreement to buy or build a qualifying home.
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You have to occupy qualifying home as your principal residence within one year of buying or building it or if you buy home for disabled person then that disable person have to occupy that home within 1 year of buying or building.
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If you have common law partner or spouse, then you can also withdraw upto $60K form their account so total withdrawal amount would be $120K
If you have any Mortgage queries for HBP or any other queries about mortgage, then you can contact Sarabjit
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