Home Purchase Down Payment with RRSP

DID YOU KNOW? Home Purchase Down Payment with RRSP

I’m sure most people know that there is a government program that allows you to take money from your RRSP without tax implications in order to use it as a down payment on a property but did you know the following:

1. The money must be there for at least 90 days in order to qualify for taking out.
2. The allowable withdrawal has been increased in the past few years from $20,000. to $25,000.00
3. If you have a spouse you can both take $25,000.00 out
4. You have the year you took the money out plus 2 additional years before you have to start paying it back into your RRSP.

5. You have 15 years to pay it back into your RRSP
6. I would advise transferring the balance into something that does not fluctuate as you move closer to the possibility of using it.

7. It can take anywhere from 2 days to over a week to get the money out. Very important to know as you may need the money even sooner than this if you have to put a deposit on a property in order to purchase it.

8. The easiest way to get it back into your RRSP is through an automatic savings plan.
9. The property must be your principal residence.

The Homebuyer’s withdrawal plan is a government program so please check out their website for the latest on the details as well as other qualifications in order to take advantage of it if it makes sense for you.

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

 

A special thank you to Tony Marchigiano | Mortgage Specialist, RBC Royal Bank for sharing this article. Should you have any questions please contact Tony Marchigiano at 604.505.7109 or tony.marchigiano@rbc.com

 

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