Only the individual who is entitled to receive payments from the RRSP (the annuitant) can withdraw funds from an RRSP. You can make withdrawals from more than one RRSP as long as you are the annuitant (plan owner) of each RRSP. Your RRSP issuer will not withhold tax on these amounts.
Generally, you will not be allowed to withdraw funds from a locked-in RRSP or a group RRSP.
Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year.
Before applying to withdraw funds under the HBP you must meet the following conditions:
- You have to enter into a written agreement to buy or build a qualifying home for yourself, for a related person with a disability, or to help a related person with a disability buy or build a qualifying home. Obtaining a pre-approved mortgage does not satisfy this condition.
- You have to intend to occupy the qualifying home as your principal place of residence no later than one year after buying or building it. If you buy or build a qualifying home for a related person with a disability, or help a related person with a disability buy or build a qualifying home, you must intend that that person occupy the qualifying home as his or her principal place of residence.
- You have to be considered a first-time home buyer.
- In all cases, your repayable HBP balance on January 1 of the year of the withdrawal has to be zero.
If you are withdrawing funds from your RRSPs to help a related person with a disability buy or build a qualifying home, it is the related person with a disability who must have entered into such an agreement.
Even if you or your spouse or common-law partner have previously owned a home, you may still be considered a first-time home buyer.
When a withdrawal is made you must meet the following conditions:
- Neither you nor your spouse or common-law partner or the related person with a disability that you buy or build the the qualifying home for can own the qualifying home more than 30 days before the withdrawal is made.
- You have to be a resident of Canada.
- You have to complete Form T1036 for each eligible withdrawal. For more information on completing the form, go to Completing Form T1036.
- You have to receive all withdrawals in the same calendar year.
- You cannot withdraw more than $25,000.
After all your withdrawals have been made you must meet the following condition:
- You have to buy or build the qualifying home for yourself, for a related person with a disability, or to help a related person with a disability buy or build a qualifying home before October 1 of the year after the year of the withdrawal.
What happens if you do not meet all the HBP conditions?
You are responsible for making sure that all HBP conditions that apply to your situation are met.
If a condition is not met while you are participating in the plan, your RRSP withdrawal will not be considered eligible. You will have to include the RRSP withdrawal as income on your income tax return for the year you received the funds. If we have already assessed your return for that year, we will reassess it to include the withdrawals.
If you do not meet the conditions to participate in the HBP in the current year, you may be able to participate at a later year.
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