Around 20 years ago, the Federal govt introduced the RRSP Home Buyer’s Plan. The goal was to stimulate a depressed housing market in the early ’90s. The plan is really quite simple. First time homebuyers could borrow up to $20,000 from their RRSP to be used towards the purchase of a home. Buy with a spouse or your common-law spouse and you’ve doubled the amount to $40,000.
There really is no catch. You simply have to pay it back to your RRSP plan over a 15 year period. The minimum payment is 1/15th of the amount that you withdrew payable each year. That’s it.
Today, the plan still exists with a slightly higher limit and more flexibility. You can now withdraw up to $25,000 per person… still capped at 2 people max per purchase (married or common-law spouse). You can also participate in the Home Buyer’s plan if you haven’t owned a home in the last 5 years. This can work to your advantage if you previously owned but sold. click here for the full guidelines and qualifications. Continue reading “Federal Govt’s rrsp Home Buyer’s plan nets this couple a $15,000 tax refund.”