Exam CIFC Topic 1 Question 86 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 86
Topic #: 1

Which of the following statements describes a feature of the Home Buyers' Plan (HBP)?

A. To qualify- as a first-time home buyer you or your spouse must never have previously owned a home B. Once you are required to repay the amounts back to your RRSP. any missed or incomplete payments are subject to tax. C. A qualifying home must be purchased by December 31 of the year of withdrawal. D. If you have a spouse or common-law partner, each of you can withdraw up to JE50.000 from your registered retirement savings plans (RRSPs).

Suggested Answer: B Vote an answer

Explanation
The Home Buyers' Plan (HBP) is a program that allows eligible first-time home buyers to withdraw up to
$35,000 from their registered retirement savings plans (RRSPs) to buy or build a qualifying home without paying any tax on the withdrawal. The withdrawn amount must be repaid to the RRSP over a period of up to
15 years, starting from the second year after the withdrawal. If the required repayment for a year is not made, it is added to the taxpayer's income and subject to tax. Therefore, option B describes a feature of the HBP. The other options are not correct descriptions of the HBP. Option A is false because to qualify as a first-time home buyer, you or your spouse must not have owned and lived in another home as your principal place of residence during the four-year period before the date of withdrawal. Option C is false because a qualifying home must be purchased or built before October 1 of the year following the year of withdrawal. Option D is false because if you have a spouse or common-law partner, each of you can withdraw up to $35,000 from your RRSPs, not
$50,000. References: [Home Buyers' Plan (HBP)], [Home Buyers' Plan (HBP) - Canada.ca], [Home Buyers' Plan (HBP) | GetSmarterAboutMoney.ca]

by Levi at Jan 13, 2024, 10:55 PM

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