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:
You must have entered into a written agreement to buy or build a qualifying home
You must purchase your home by October 1 in the year following your RRSP withdrawal.
All RRSP withdrawals must be in the same calendar year.
Withdrawals from RRSP funds cannot include amounts from contributions made in the previous 90 calendar days.
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.
You must live in the home for at least one year after the date of purchase.
There can be no more than two (2) first-time buyers in the purchase of a new 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)