Everything You Need to Know About the Home Buyers' Plan + MORE Apr 14th

Buying a house can be a great investment, but finding the cash to do so can be hard. The Home Buyers’ Plan (HBP), a program offered by the Government of Canada, is one way to help you make the big move, but there are a few things you need to know before you take the next step.

1. What is the HBP?
The Home Buyers’ Plan is a government program that facilitates the purchase of your first home by allowing you to use part of your Registered Retirement Savings Plan (RRSP) as a tax-free, cash down payment.

2. How much can I withdraw?
Each spouse can withdraw up to $25,000 from his or her RRSP, tax-free. These amounts can be withdrawn from an RRSP from any financial institution, including the Fonds de solidarité FTQ. If each spouse wants to put down more than $25,000 in cash, he or she will have to save that money in another financial product to achieve that goal.

3. How do I find out if I am eligible?
To determine your eligibility for the HBP, simply fill out the appropriate Revenue Canada form…

Q: I am 38 years old with $98,000 in my RRSP and I will have a defined benefit pension when I retire from my current employment. My current annual income is approximately $90,000.
My wife is 33 years old with $20,000 in her RRSP and is self-employed, therefore she has no pension plan other than her own savings. Her current annual income is approximately $35,000.
We are currently both contributing $100 monthly to our respective RRSP but I am thinking to move both contributions to a spousal RRSP in my wife’s name in order to maximize income splitting when we retire.
Does this look like a good strategy and how would this affect required Home Buyer’s Plan repayments? I have a minimum repayment of $686 and my wife’s is $310.
—Simon
A: Retirement planning is an important exercise, whether you’re in your 70s or your 30s. There are different strategies to employ depending on your age and at your age, Simon, the keys are how much to save and where to save it. Setting targets early can help you determine how much you can spend on other things like a home, travel and double-doubles…

One of the short-term motivations to contribute to an RRSP is to lower your annual income tax. With a Fonds de solidarité FTQ RRSP, you get even more savings. What is not to like about that?

For example, if you save $1,000 a year in a Fonds RRSP, you will get 30 percent more income tax savings on top of the usual RRSP deductions. That means that for every $1,000 in your RRSP, you have only had to invest $329.*

The process is made easier when you set up automatic deductions from your paycheque at the frequency you prefer. When the amount is deducted at source, you will benefit from additional tax savings on each paycheque.

The Fonds de solidarité FTQ calculator is a tool that will give you a clear picture of the possible scenarios according to your taxable income and desired annual contribution.

Once this financial habit is part of your lifestyle, each spring will be that much more enjoyable. In fact, investing in an FTQ RRSP is the best decision you can make to save more quickly without compromising your quality of life…