Using your RSP as downpayment for your first home


When you are just starting out it is hard to save both for your future and for your first home. As a first time home buyer you have the option of using up to $25,000 of your RSP's, or $50,000 for a couple under the Home Buyers Plan (HBP). The amount withdrawn from the RSP must be "re-paid" to the RSP within 15 years of the withdrawl.

Funds to be extracted from an RSP must have been in your RSP account for a minimum of 90 days prior to extraction.

Repayment of your HBP Balance:  Each year an amount must be returned to your RSP until the Home Buyers Plan balance returns to zero. In the event that the payment is not repaid during the year the amount will be included in your income for that year. You may return lump sums or make larger payments to your HBP at any time. You have 2 years to begin repayment of your HBP balance.

In order to qualify for the HBP the following criteria must be met:

1. You have entered into an agreement to purchase or build a qualifying home. (a pre-approval for a mortgage is not enough)

2. You intend to occupy the home as your principle place of residence no later than one year after purchase.

3. You are considered a first time home buyer.

4. Your repayable balance on the HBP on January 1st of the withdrawl year is zero.

For more information on using your RSP towards your downpayment contact your mortgage specialist.

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