Good Morning Everyone,
One subject that doesn’t get touched enough on is how First Time home buyers can withdraw up to $25,000 per individual when it comes to a home purchase all of this is a tax free withdrawal as well!
Important details you must know with regards to doing a withdrawal:
– You don’t actually have to be a first time home buyer.
– As long as you have not owned real estate in a period of 4 years prior.
– The money withdrawn does have to be paid back eventually.
– Repayment doesn’t start until year 2 of your initial withdrawal.
– 15 year repayment which has to be made in equal payments (1/15 of the amount withdrawn). If not it will be counted towards your income of that year and you will be taxed on it.
– You do not have to withdraw the money immediately.
– It can take up to 10 days for withdrawn funds to reach your bank.
– Most importantly the money withdrawn has to have been in your RRSP for a period of AT LEAST 90 days to qualify.
When it comes to providing paperwork to your mortgage specialist you will need to show that the funds have been in your account for 90 days and a copy of the cheque that you received once withdrawn.
See attached link directly to the government website giving you all the necessary information as well: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html