7 April 2010 External T.I. 2009-0348001E5 - HBP - withdrawal limit

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Principal Issues: Can a husband and wife each withdraw up to $25,000 from their RRSPs under the Home Buyers' Plan ("HBP") to acquire a qualifying home?

Position: Yes. Each individual is permitted to withdraw up to $25,000 from an RRSP under the HBP, provided all other conditions for participation in the HBP are met.

Reasons: The legislation permits each individual to withdraw up to $25,000.

XXXXXXXXXX 					2009-034800

April 7, 2010

Dear XXXXXXXXXX :

Re: Home Buyers' Plan Withdrawal

This is in reply to your email sent November 12, 2009 concerning the Home Buyers' Plan ("HBP"). You have requested written confirmation that a husband and wife can each withdraw up to $25,000 from their Registered Retirement Savings Plans ("RRSPs") under the HBP for a combined amount of up to $50,000.

Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Ruling, dated May 17, 2002. This Information Circular and other Canada Revenue Agency ("CRA") publications can be accessed on the Internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. However, we are prepared to offer the following general comments that may be of assistance.

An amount may be withdrawn from an individual's RRSP to buy or build a qualifying home in accordance with the HBP provisions in section 146.01 of the Income Tax Act ("the Act"). As you are aware, the CRA's general views regarding the HBP are expressed in Guide RC4135, Home Buyers' Plan. In order to withdraw funds from an RRSP under the HBP, an individual must satisfy several conditions, as described in that guide. Where these conditions are met, the amount withdrawn would not have to be included in the individual's income under subsection 146(8) of the Act. Whether a specific individual would meet all of these conditions is a question of fact.

Pursuant to the definition of "regular eligible amount" in subsection 146.01(1) of the Act, an individual is permitted to make a single withdrawal or a series of withdrawals from his or her RRSP under HBP, subject to a withdrawal limit. For 2009 and later years, in respect of withdrawals made after January 27, 2009, the withdrawal limit has been increased to $25,000 from $20,000. Therefore, if an individual buys a qualifying house with his or her spouse, they can each withdraw up to $25,000 from their RRSPs for a combined amount of up to $50,000, provided all other conditions for participation in the HBP are met.

We trust these comments are of assistance.

Yours truly,

Jenie Leigh
Manager
for Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch