Am I still eligible for the Home Buyer's Plan if I inherited a house?

Gena Katz, a chartered accountant and principal with Ernst and Young, has the answer.

Gena Katz 18 December, 2002 | 2:00PM
Dear Expert:

In 1997 my father passed away. Since he did not have a will, by default, I inherited part of his assets, which included his house. It was also my principal residence up until July 2001. Because the house was inherited and not purchased, am I still eligible for the RRSP Home Buyer's Plan?

Expert Opinion:

It appears you will not be able to make use of the plan, at least not at this time.

The Home Buyer's Plan permits first-time homebuyers to withdraw up to $20,000 from an RRSP to finance the purchase of a home. An individual is considered to be a first-time homebuyer if neither the individual nor his or her spouse (or common-law partner) owned a home and lived in it as their principal place of residence during any of the five calendar years beginning before the withdrawal date.

In other words, someone who has owned and lived in a home within the past five years does not qualify for the Home Buyers' Plan. So, in your case, the fact that the home you previously owned was inherited, as opposed to purchased, is irrelevant in determining eligibility. Because you owned and lived in a house in 2001, you will not be eligible to withdraw funds under the plan until 2007. Your eligibility, of course, assumes you or your spouse or partner do not own or live in a home during the five calendar years ending Dec. 31, 2006.

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Gena Katz

Gena Katz