What is the minimum annual repayment amount for Lalita's Home Buyers' Plan (HBP) withdrawal of $25,000?

To determine the minimum annual repayment amount for Lalita's Home Buyers' Plan (HBP) withdrawal of $25,000, it's important to understand how the HBP works. Under the HBP, individuals can withdraw funds from their Registered Retirement Savings Plans (RRSPs) to purchase a home, with the requirement that the withdrawals must be paid back over a period of time.

The total amount that must be repaid to the RRSP is divided into a specific number of years, with the minimum repayment period being 15 years. Therefore, for any amount withdrawn, the minimum annual repayment is calculated by dividing the total withdrawal amount by the number of years over which it must be repaid.

In this case, for a withdrawal of $25,000, the calculation for the minimum annual repayment would be:

$25,000 divided by 15 years = approximately $1,666.67.

This amount represents the minimum that Lalita must repay each year to ensure that she meets the requirements of the HBP and maintains her eligibility for the tax-free benefits of the initial withdrawal.

This calculation is based on the standard rules set out by the Canadian government for the Home Buyers' Plan, ensuring that participants can fund their home purchases while having a