USING RRSP FUNDS FOR YOUR DOWN PAYMENT

Many first-time buyers don’t realize they can use their RRSPs toward a down payment.

But there are rules and requirements that can make or break your eligibility.

Here’s what you need to know 👇

1️⃣ What counts as a first-time home buyer

You don’t have to be buying your very first property in your lifetime.

You qualify as long as you haven’t lived in a home owned by you or your spouse in the last 4 years.

✔️ applies to both buyers individually

✔️ spouse ownership can disqualify you

✔️ rental or investment ownership is treated differently

One spouse can still qualify even if the other does not.

2️⃣ How RRSP withdrawals work for a down payment

RRSP funds can be used toward your home purchase without tax withheld at withdrawal.

There are specific conditions to follow.

✔️ must be a Canadian resident at withdrawal

✔️ all withdrawals must occur within the same calendar year

✔️ funds must be in your RRSP for at least 90 days

You must also be the owner of the RRSP you’re withdrawing from.

3️⃣ Limits and restrictions you need to know

There are limits on how much you can withdraw and which accounts you can access.

✔️ withdrawals capped at $25,000 under basic guidelines

✔️ locked-in or group RRSPs usually do not qualify

✔️ contributions made within 90 days may not be deductible

You can withdraw from multiple RRSPs as long as you are the owner.

4️⃣ Understanding the repayment rules

RRSP withdrawals for a home purchase must be repaid over time.

This prevents the withdrawal from being permanently tax-free.

✔️ 15-year repayment period

✔️ minimum annual repayment required

✔️ you may repay faster if you choose

Example: withdrawing $15,000 requires $1,000 per year in repayment.

💬 Final Thought

Using RRSP funds can make homeownership possible sooner — but only if you understand the rules clearly.

If you want help planning your down payment strategy, message The Frontline Mortgage Group anytime. 💬