Humber/Ontario Real Estate Course 3 Exam Practice

What is the purpose of a Home Buyers' Plan (HBP) in real estate?

1. To allow withdrawals from registered retirement savings for a home purchase.

2. To provide insurance coverage for home buyers.

3. To estimate the market value of a property.

4. To assess the environmental impact of a property.

5. To facilitate monthly mortgage payments directly from savings accounts.

6. To provide tax deductions for home improvement expenses.

The correct answer is: To allow withdrawals from registered retirement savings for a home purchase.

The Home Buyers' Plan (HBP) is specifically designed to enable individuals to withdraw funds from their registered retirement savings plans (RRSPs) to assist in purchasing or building a home. This program allows first-time home buyers to access up to a certain limit from their RRSPs without incurring immediate tax penalties, provided the funds are repaid to the RRSP over a specified period. This option is particularly beneficial as it helps first-time buyers accumulate the necessary down payment, easing the financial burden associated with home purchases. As individuals often find saving for a down payment to be one of the most challenging aspects of buying a home, the HBP serves as a crucial tool in making homeownership more accessible. The other options focus on different aspects of real estate that do not align with the primary function of the Home Buyers' Plan. For instance, insurance coverage, property valuation, environmental assessments, mortgage arrangements, and tax deductions for home improvements serve entirely different purposes within the real estate landscape and do not relate to the HBP’s goal of facilitating home purchases through pension fund withdrawals.