Are we eligible for the home buyers’ plan?

Q – My wife and I are in our 50s. We owned a home for many years that we lived in until March 1998. At that time we were forced to move from the area so I could take up work elsewhere. We ended up selling the home a year later but have been renting since we moved away from the one we owned. Does the Home Buyers’ Plan waiting period for our next enrollment begin when we sold the home or when we moved away from it?

A – The Home Buyers’ Plan is the federal government program that allows you to borrow up to $20,000 from an RRSP to help finance the purchase of a new house. The plan is theoretically open only to first-time home buyers, but the interpretation of that is very broad. In fact, you or your spouse may have owned a home before and still qualify. Here is the way the rule it worded. You can find more details by going to the Web site of the Canada Customs and Revenue Agency

“You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal, you or your spouse owned a homehat you occupied as your principal place of residence.

“Example: You want to participate in the HBP in 2001. To be considered a first-time home buyer, you or your spouse cannot have owned and occupied as your principal place of residence a home at any time during the period beginning January 1, 1997 and ending 31 days before your withdrawal in 2001.”

As you can see, the operable date in your case is the time when you moved out of the house. At that point it was no longer your principal residence, and the HBP eligibility clock started ticking. The date you sold it is irrelevant, as long as you didn’t move back into it again at any subsequent time. Using the government’s example, it would appear you would be eligible to use the plan in 2002.