Canada’s new mortgage rules
Whether you’re a buying a home or refinancing, here are the basics of what you need to know about Canada’s new mortgage rules:
• You have entered into a written agreement to buy or build a qualifying home and you intend to occupy the home as your principal residence
• You or your spouse or common law partner have to be considered a first-time home buyer i.e. have never owned or have not owned in the last 4 calendar years and 31 days before the withdrawal
- Your HBP balance on January 1 of the year of the withdrawal has to be zero i.e. nothing is outstanding from a previous purchase
- Neither you, nor your spouse or common-law partner can own the home more than 30 days before a withdrawal is made
- You must be a resident of Canada
- You must complete Form T1036
- You have to receive all withdrawals in the same year
- You have to buy or build the home before October 1 of the year after the year of the withdrawal
- When an RRSP contribution is made, you must wait 90 days before withdrawing funds under the HBP or you may be denied the right to use that contribution as an RRSP deduction for that year
- The home can be for yourself or it can be for a related disabled person if it is more accessible to that person than his or her current home, or it is better suited to that person’s needs. You can acquire the home for the disabled person or you can provide the withdrawn funds to the disabled person to acquire the home.
