Can we use the RRSP for the Deposit?

First Time Buyer Help

 

If you are a first time buyer then you can borrow from your RRSP savings in order to help you raise the cash needed to buy your first home.  I think most people are aware of this now, but there are a couple of things to keep in mind.  First of all, you are a first time buyer if you haven’t owned any real estate for the last 5 years, in regards to this program.  You and your spouse can both qualify, and the maximum you can withdraw is $25,000. each, so that makes a total of $50,000.  Now, this loan has to be repaid, and you have 15 years to do so.  You have to make sure that you repay a minimum of 1/15th of the total loan amount back into your RRSP every year, or that money that you should have repaid each year will be considered income and you will be taxed on it.

The money that you take out of your RRSP has to have been in your account for a minimum of 90 days, and you have to be a resident of Canada to qualify for this plan.  Only one or two people can use this plan together,  and you have to move in to this property, in other words, this plan is for buyers to buy a principle residence, not an investment property.  As a first time buyer, if your income and credit are appropriate for the amount that you want to borrow, you can buy with as little as 5% down.  (Buying for investment purposes requires a minimun of 20% down, and you cannot use your RRSP funds for the downpayment).

If you would like more information on Mississauga Real Estate or Buying a Home in Mississauga, please feel free to call me on my cell phone at 416-460-6054.  I’d be happy to answer any of your questions.