How Can You Use Your RRSP To Help Buy Your First Home?

Today, about 50% of first-time home buyers use their RRSP savings to help finance a down payment. If you are a first-time homebuyer, the Home Buyers Plan (HBP) allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) tax-free to make your down payment.
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Today, about 50% of first-time home buyers use their RRSP savings to help finance a down payment. If you are a first-time homebuyer, the Home Buyers Plan (HBP) allows you to withdraw money from your Registered Retirement Savings Plan (RRSP) tax-free to make your down payment. The HBP is administered by the Canada Revenue Agency (CRA). There are certain conditions you must meet to be eligible for the HBP. The withdrawal from your RRSP does not need to be included in your income on your annual income tax return, and no tax is taken off the money you withdraw. What is the payback period? – You don’t have to start paying back the money to your RRSP until two years after the purchase of the home. – You must pay back all withdrawals from your RRSP within 15 years by making RRSP deposits each year, starting the second year following your withdrawal. CRA will determine what your minimum yearly repayment will be and will notify you once you need to start repaying the amount. – If you do not repay the amount due in a given year, it is included in your taxable income for that year and you’ll have to pay income tax on this amount. source: Financial Consumer Agency of Canada.

Ian Clark Mortgages

Ian Clark Mortgages

“It’s a people business in a complex industry that is consistently changing. My role is to take the stress out of homeownership and represent your best interests until you are mortgage-free.”

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