Do you have savings in your RRSP and you are considering buying a house. You can use the funds in your RRSP to put down payment and still not pay tax on withdrawal from RRSP.
What is the Home Buyers’ Plan?
With the federal government’s Home Buyers’ Plan, you can use up to $25,000 of your RRSP savings ($50,000 for a couple) to help finance your down payment on a home.
To qualify, the RRSP funds you’re using must be on deposit for at least 90 days. You must also provide a signed agreement to buy or build a qualifying home.
The best part is the withdrawal is not taxable as long as you repay it within a 15-year period. The payback amount is at least one-fifteenth a year of the amount you withdrew from your RRSP.
You may be able to participate in the HBP if, during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of the withdrawal, neither you nor your spouse or common-law partner owned a home that you occupied as your principal place of residence. For example, if you sold the home in 2009, you may be able to participate in 2014.
