RRSP for first home buyer

[iku]

Dose anyone know about RRSP for first home buyer?
I still dont have a rrsp acount yet. If i sign a purchase agreement with Mattamy now, do i still have a chance to buy rrsp and use it for buying my first home? or i should buy rrsp now, after 90 days i can sign a agreement with Mattamy?

[willy77nilly]

Conditions that must be met under the Home Buyer's Plan (HBP) can viewed from the link below (PDF).

http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-05e.pdf

In your case, speaking to a financial adviser and/or tax account would be recommended. If you already have the down-payment then there's probably not much benefit in using the HBP. The HBP plan is mainly for those who already have a significant amount of savings in their RRSP that they would like to use towards their down-payment without being taxed.

[miko1234]

Originally Posted by willy77nilly

Conditions that must be met under the Home Buyer's Plan (HBP) can viewed from the link below (PDF).

http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-05e.pdf

In your case, speaking to a financial adviser and/or tax account would be recommended. If you already have the down-payment then there's probably not much benefit in using the HBP. The HBP plan is mainly for those who already have a significant amount of savings in their RRSP that they would like to use towards their down-payment without being taxed.

Actually, they would still get the tax benefits to put into RRSP, leave it for 60 days, then pull it out under the HBP.

Taxes on the $20k you are allowed to put in could amount to a good chunnk of change.

[willy77nilly]

Good point Miko!

[jl9004]

I am pretty sure they actually have to be in for 90 days before they can be taken out.

[Krista]

The thread titled "Home Buyers Plan" has some good info available as well.

[mortgagehockeymom]

This is a common strategy I advise my clients on. If you are purchasing a new home from a builder, and you are planning on saving money over the building period for your downpayment, instead of putting it into a savings account, or whatnot, put it into your RRSP. As long as you stop putting it into the RSP 90 days prior to when you withdraw it from the account for closing, you will get the tax savings on your tax return for having contributed to your RSP. That way, you could also use your increased return towards downpayment as well.

Obviously, this would depend a little on your particular situation, but it is a very common strategy. I am always surprised when mortgage specialists do not bring this up with their clients. (but I'm a little biased on that comment) haha

Jessica