Ontario Home Ownership Savings Plan - 2004 Update

Information Bulletin 6305, May 2004

Termination of the Ontario Home Ownership Savings Plan Program

The 2004 Ontario Budget, delivered on May 18, 2004, announced the termination of the Ontario Home Ownership Savings Plan (OHOSP) program.
After May 18, 2004, it is proposed that no new OHOSPs be opened and no new contributions to existing plans will be eligible for Ontario tax credit purposes.
The OHOSP program is proposed to end on December 31, 2005.

Please note that the legislation must receive passage by the Legislature and Royal Assent to become law.

OHOSP contributions up to and including May 18, 2004 are eligible for the tax credit, and official OHOSP tax credit receipts will be issued for those contributions.
The OHOSP tax credit (up to $500 per person or $1000 per couple) is claimed on your ON479 Ontario Credits form included with the federal income tax package. The tax credit is dependent on net income and the amount deposited into the plan for the year.
The financial institution issues official receipts (T1C-OHOSP) for all deposits made into the plan. The receipts must be included with the OHOSP tax credit claim.
Contributions made after May 18, 2004, are not eligible for a tax credit and receipts cannot be issued.

Planholders will continue to have up to seven years to buy a home, however, the plan must be closed at the end of the seventh year.
If you close your plan and buy a home, your financial institution will release your OHOSP funds to your solicitor.
If you close your plan without buying a home, you must complete an OHOSP Termination form and your financial institution will release 75% of your total plan assets to you. The remaining 25% will be sent to the Ministry of Revenue and used to recover tax credits and interest charges. The Ministry will send you any balance owing, with interest (if applicable). If the amount withheld is insufficient to recover the tax credits and interest charges, you will be asked to repay the outstanding amount.

Plans that have not reached the end of their seventh year on or before December 31, 2005, do not have to be closed. The funds can remain in the account after December 31, 2005, however the plan will no longer be considered an OHOSP.
Funds withdrawn after this date are not subject to the 25% withholding rule and can be used for any purpose.

For more information, or to obtain bulletins on other Ministry of Revenue programs, visit our website at ontario.ca/revenue or call the ministry:

Or Write to:
Ministry of Revenue
Client Accounts and Services Branch
33 King Street West
PO Box 624
Oshawa ON L1H 8H8

This Information Bulletin is provided as a guide only. It is not intended as a substitute for the Act and Regulations.

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