The Home Buyers’ Plan: A Guide for Alberta’s First-Time Homebuyers

Buying your first home can be a financial challenge, but the Home Buyers’ Plan (HBP) offers a smart solution for Canadians, including those in Alberta. This federal program allows you to withdraw up to $35,000 tax-free from your RRSP (or $70,000 as a couple) to put toward a down payment on your first home. Here’s how it works, why it’s helpful, and how it connects with local Alberta programs.

What Is the Home Buyers’ Plan?

The HBP is a program designed to help first-time buyers access their RRSP savings without paying immediate taxes. By using your retirement savings, you can reduce the financial pressure of buying a home while still planning for the future.

How Does It Work?

1.Eligibility:

•You’re considered a first-time buyer if you haven’t owned a home within the last four years.

•You must have a written agreement to buy or build a home.

•The home must be your primary residence within a year of purchase.

2.Withdrawal Limits:

•You can withdraw up to $35,000 per individual or $70,000 per couple from your RRSPs.

3.Repayment:

•You have 15 years to repay the amount into your RRSP, starting two years after the withdrawal.

•Repayments are annual, and any missed payments are added to your taxable income.

Why Use the HBP in Alberta?

1. Alberta-Specific Advantages:

•Alberta has no provincial land transfer tax, making it cheaper to close on a home.

•The lower cost of living compared to provinces like Ontario or BC means your HBP withdrawal stretches further.

2. Local Housing Programs to Pair With HBP:

•Attainable Homes Calgary: Affordable housing options for moderate-income buyers.

•First Place Program (Edmonton): Reduced costs for townhomes on surplus municipal land.

3. Down Payment Benefits:

•Use the HBP to reach the 20% down payment threshold, saving on mortgage insurance premiums.

•Larger down payments mean smaller monthly payments and better interest rates.

Example: How the HBP Can Work for You

Imagine you’re buying a $400,000 home in Calgary:

•Your savings: $10,000 in cash + $30,000 in your RRSP.

•With the HBP, you can withdraw the $30,000 tax-free, giving you a total of $40,000 for the down payment.

•By reaching 10%, you lower your mortgage costs and improve your financial standing.

How to Apply for the HBP

1.Check Eligibility: Confirm you qualify as a first-time buyer.

2.Request Withdrawal: Use Form T1036 from the CRA to withdraw from your RRSP.

3.Purchase Your Home: Ensure the funds are used within 90 days of withdrawal.

4.Plan for Repayment: Set up automatic contributions to meet repayment requirements.

For official details, visit the CRA’s HBP page:

What Is the Home Buyers’ Plan?

HBP Tips for Alberta Buyers

•Combine Programs: Use the HBP with the First Home Savings Account (FHSA) for maximum savings.

•Work With Experts: Partner with a realtor and financial advisor to make informed decisions.

•Plan for the Future: Consider your ability to repay the RRSP withdrawal over 15 years.

Conclusion

The Home Buyers’ Plan is a powerful tool for making homeownership a reality in Alberta. By accessing your RRSP savings, you can reduce your financial burden and secure your dream home faster. Whether you’re eyeing a house in Calgary, Edmonton, or a quieter rural area, the HBP can help you take that first step.

Contact Hasan Sharif

📧 hasan.sharif@exprealty.com

📞 403-808-9705

Future Articles

•“HBP vs. FHSA: Maximize Your Savings for a First Home”

•“How to Repay Your HBP Without Breaking Your Budget”

•“Step-by-Step Guide to Using the HBP in Alberta”

•“Top Affordable Neighborhoods for First-Time Buyers in Alberta”

•“HBP Success Stories: How Buyers Made It Work”