Understanding the Home Buyers’ Plan & Using Your RRSP’s for a Down Payment
You want to use your RRSP’s as down payment and you want to ensure that it’s being used as part of the Home Buyers’ Plan.
So what does that mean?
Some of the rules with this program are;
- your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw the funds under the Home Buyers’ Plan.
- you must occupy the qualifying home as a principal place of residence
- you must be considered a First-Time Home Buyer
- you must complete a Form T1036
- you must be a resident of Canada
- you can not have owned a home for the last 4 years.
- you must make your final withdrawal no later than 30 days after your closing date
- Repayment of your withdrawal must be made within a period of no more than 15 years until your Home Buyers’ plan balance is zero
- First payment must be made within 2 years of purchase
Let’s look at an example:
In 2013 your RRSP withdrawal is $19,500
In 2014 no re-payment is made
In 2015 your minimum re-payment is $1,300 ($19,500 / 15 years = $1,300 per year)
If you continue to make a payment of $1,300 each year, you will have repaid your Home Buyer’s Plan within the 15 years allowed.
This is just one program available to first-time home buyers, make an appointment with your Mortgage Broker/Agent today to learn more about other programs and how you qualify.
written by Ana Cruz
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