R.R.S.P. INFO
Who can participate?
You can participate in the Home Buyers' Plan is you are the annuitant under an RRSP. If you are the annuitant under a locked-in RRSP you may not be allowed to withdraw funds from that RRSP. Your RRSP issuer can give you more information about the types of RRSPs that you have.
How do you participate?
To participate in the Home Buyers' Plan in 1996, you have to withdraw an amount from your RRSP using Form T1036, Applying to Withdraw an Amount Under the Home Buyers' Plan in 1996. You have to complete Form T1036 for each withdrawal that you make. You can get a copy of Form T1036 from your income tax office.
After you complete Areas I and II of Form T1036, give it to your RRSP issuer. Your RRSP issuer will not withhold tax from the funds you have requested be withdrawn.
When you complete Form T1036, you have to certify that you meet or intend to meet a number of conditions. We discuss these conditions in the following section.
What conditions do you have to meet
to participate in 1996?
To participate in the Home Buyers' Plan in 1996, you have to make your request for withdrawal from your RRSP before January 1, 1997.
If you request to withdraw more than one amount from your RRSPs before January 1, 1997, and you receive one amount in 1996 and the second amount in January 1997, you are considered to have both amounts in 1996 and are considered a participant in the Home Buyers' Plan in 1996.
Exception--In cases where you complete Form T1036 and receive an amount from your RRSP under the Home Buyers' Plan in 1996, and you then complete a second Form T1036 before January 1, 1997 to withdraw a second amount which you receive after January 1, 1997, that second amount may be considered received under the Home Buyers' Plan in 1996. It this situation applies to you, contact your income tax office.
You must not have previously participated
Generally, you can participate in the Home Buyers' Plan only once in your lifetime. If you participated in the Home Buyers' Plan before 1996 and you buy or build a qualifying home, you cannot participate in 1996 or any subsequent year. If you participate in the Home Buyers' Plan in 1996 and you buy or build a qualifying home, you cannot participate in 1997 or any subsequent year.
These conditions apply even if you sell the qualifying home that you bought or built, and repay your withdrawals.
Exception--In some cases, you may have cancelled your participation in the Home Buyers' Plan in 1996, or an earlier year, because you did not buy or build a qualifying home. If this apples to you, you can still participate in the Home Buyers' Plan in 1996. If you cancel your participation because you became a non-resident before you bout or built a qualifying home, you may be able to participate at a later time if you again become a resident of Canada.
You have to be a resident of Canada
You have to be a resident of Canada at the time you received funds from your RRSP under the Home Buyers' Plan.
If you are not sure whether you are a resident or non-resident of Canada, or you need more information about residency status, contact your income tax office.
You have to enter into a written agreement to buy or build a qualifying home.
Another condition you have to confirm at the time you withdraw an amount, is that you have entered into a written agreement to by or build a qualifying home.
A qualifying home is a housing unit located in Canada. Both existing homes and those being constructed are qualifying homes. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, four-plexes or apartment buildings are all qualifying homes. A share in a c-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada, is also a qualifying home. However, a share that only provides you with a right to tenancy in the housing unit is not considered a qualifying home.
Provided you meet all the conditions for making a withdrawal under the Home Buyers' Plan, and you buy or build a qualifying home, you may use the particular funds withdrawn under the Home Buyers' Plan for other purposes.
You can withdraw, in total, up to $20,000
You can withdraw up to $20,000 under the Home Buyers' Plan. You can make more that one RRSP withdrawal in a year under the Home Buyers' Plan, as long as the total of your withdrawals is no more than $20,000. For each withdrawal, you have to complete Form T1036, Applying to Withdraw an Amount Under The Home Buyers' Plan in 1996.
If you are married, both you and your spouse can participate in the Home Buyers' Plan. Each spouse can withdraw up to $20,000 from their own RRSPs.
Note that the term spouse used throughout this pamphlet, apples to a legally married spouse and a common-law spouse. A common-law spouse is a person of the opposite sex who, at that particular time, is living with you in a common-law relationship, and;
* is the natural or adoptive parent (legal or in fact) of your child; or
* had been living with you for at least 12 continuous months, or had previously lived with you in such a relationship for at least 12 continuous months (when you calculate the 12 continuous months, include any period of separation of less than 90 days).
Once either of these two situations applies, we consider you to have a common-law spouse, except for any period that you were separated for 90 days or more due to a breakdown in the relationship.
You have to be considered a first-time home buyer
To participate in the Home Buyers' Plan in 1996, you have to be considered a first-home buyer at the time you withdraw an amount from your RRSP under the Home Buyers' Plan.
Under the Home Buyers' Plan you are considered a first-time home buyer, if, at any time during the period beginning January 1, 1991, and ending 31 days before your withdrawal in 1996, you did not own a home while you occupied it as your principal place of residence.
However, if you are married at the time of your withdrawal, you are not considered a first-time buyer if, at any time during the period beginning January 1, 1991, and ending 31 days before your withdrawal in 1996, your spouse owned a home while both of you occupied it during your marriage (it must be your spouse's principal place of residence). Therefore, sometimes only one spouse can participate in the Home Buyers' Plan.
For the purpose of the Home Buyers' Plan, a home is a housing unit, or a share of a co-operative housing corporation (the share must entitle you, the owner, to possess and have an equity interest in a housing unit owned by the corporation). If you previously acquired a share that provided you with only a right to tenancy, you may still be considered a first-time home buyer.
If you want to withdraw more that one amount under the Home Buyers' Plan in 1996, make sure you are considered a first-time home buyer at the time you withdraw each amount.
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