You may have heard that first-time buyers can use money from their RRSP (Registered Retirement Savings Plan) tax and penalty-free, to help buy a home. This is called the Home Buyers Plan, or HBP for short.
But as of January 1st, individuals who are separated will ALSO be able to take advantage of the HBP for up to four years following their separation. Ex-partners (formerly married or common-law) can withdraw up to $35,000 tax-free to use towards a down payment of a home even if they are NOT a first-time home buyer.
The former principal residence must be disposed of no later than two years after the HBP withdrawal. And any existing balances from using the HBP (as a first-time buyer or otherwise) must be repaid in full before applying again.
It’s not quite a good enough reason to get divorced, but if the situation is inevitable, this program can really help someone get back into the housing market sooner and to continue building wealth for the family.
The Charlton Advantage Real Estate Team applauds this responsible and much needed change in policy.
Want more information? This is a great resource to get you started. As always, we recommend speaking to your lawyer and your accountant to see if this program is right for you.