An Alberta buyer is using their RRSP under the Home Buyers' Plan (HBP) for their down payment. What is the maximum withdrawal allowed, and what is the repayment requirement?
Correct Answer
B) Maximum $60,000, repaid over 15 years starting the second year after the withdrawal
Under the federal Home Buyers' Plan (HBP), as updated, first-time home buyers in Alberta (and all of Canada) can withdraw up to $60,000 from their RRSPs tax-free for a home purchase. The withdrawn amount must be repaid to the RRSP over 15 years, with repayments beginning the second year following the year of the withdrawal. Failure to repay the annual minimum results in that amount being added to taxable income.
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