Do you understand the first time buyers programs in Canada? There is good news for first time homebuyers that have RRSP savings. Did you know that if you are a first time homebuyer, the Canadian government allows you to use money from your RRSP toward your new home? The program is called the Homebuyers’ Plan (HBP) and it allows you to withdrawal up to $25,000 from your RRSP tax- free.
There are a few conditions that apply to qualifying for a HBP. Firstly, you have to intend to occupy the home as your principal place of residence no later than one year after buying it. Therefore, it does not work particularly well for investment properties. The RRSP contributions also needs to have been in your account for at least 90 days before you can withdrawal them. This means that you need to plan ahead.
The government gives you up to 15 years to repay the amount. Not too shabby!
For more information on using RRSPs for your first home, visit the Canada Revenue Agency website at www.cra-arc.gc.ca or reach out to me at www.thompsonsells.com.
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