Using RRSPs For Your Down Payment
RRSP Home Buyer's Plan
Under the Home Buyers' Plan, first-time home buyers can withdraw up to $20,000 tax free from their RRSPs (or up to $40,000 per couple) to finance a home purchase. These funds can be used for the down payment, closing costs or other expenses. Please visit the Government of Canada website for further details.
Some conditions apply:
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You must have entered into a written agreement to buy or build a qualifying home.
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You must purchase your home by October 1 in the year following your RRSP withdrawal.
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All RRSP withdrawals must be in the same calendar year.
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Withdrawals from RRSP funds cannot include amounts from contributions made in the previous 90 calendar days.
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To remain tax free, all funds must be repaid within 15 years. Repayments start in the second calendar year following the withdrawal and are not tax deductible.
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You must live in the home for at least one year after the date of purchase.
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There can be no more than two (2) first-time buyers in the purchase of a new home.
*Qualifying home: For the purposes of the Home Buyers' Plan, a qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in, a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify. (*courtesy, Government of Canada)
