Real Estate

Advice for First Time Home Buyers' Plan (HBP)

  • Last Updated:
  • Jul 13th, 2020 12:18 pm
[OP]
Sr. Member
Nov 1, 2016
541 posts
494 upvotes

Advice for First Time Home Buyers' Plan (HBP)

Hello RFD Colleagues,
I have purchased my first house and am looking into leveraging First Time Home Buyers' Plan (HBP).

I have invested in a top 5 bank stock as RRSP contribution for last 4 years but now the share price of this bank is $50 compared to $70 before COVID.

Would it make sense to withdraw from RRSP now to leverage HBP or because the stock price is so low, it would not make sense. I don't necessarily need this money but if it can be withdrawn now to my benefit under this plan, I would then only do it.

Please advice. Thanks. Appreciate it.
7 replies
Deal Fanatic
Jan 19, 2017
7223 posts
4225 upvotes
If you think the stock price would never recover, then sell it. You don’t have to take the money out from RRSP. Just keep cash in your RRSP.
[OP]
Sr. Member
Nov 1, 2016
541 posts
494 upvotes
Am expecting the bank stock price to eventually rise but not in the foreseeable future.
Deal Fanatic
Jan 19, 2017
7223 posts
4225 upvotes
irfan1729 wrote: Am expecting the bank stock price to eventually rise but not in the foreseeable future.
you said ' I don't necessarily need this money but if it can be withdrawn now to my benefit under this plan'. what kind of benefit are you expecting?
Deal Fanatic
Jan 19, 2017
7223 posts
4225 upvotes
irfan1729 wrote: Tax break...
No tax break when taking out from RRSP for HBP. You already got refund when you put money into RRSP. Selling bank stock because you don’t want to own it and taking money from RRSP for HBP has nothing to do with each other.
[OP]
Sr. Member
Nov 1, 2016
541 posts
494 upvotes
Ok. Thanks. As expected, no point to go with Home Buyers' Plan (HBP) in my case.
Jr. Member
Sep 28, 2017
145 posts
104 upvotes
While there is no tax benefit to withdrawing from RRSP for HBP, I used it because I knew I would have to pay it back (over 15 years). Because I'm 'forced' to pay back ~$1600/yr, it's growing my retirement savings. Otherwise, would I be saving that extra amount? hell no!

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