RRSP Home Buyers Plan Update
RRSP Home Buyers Plan changedThe changes to the RRSP Home Buyers Plan introduced in the new budget are positive for potential home buyers .
The 2009 budget increases the withdrawal limit for the RRSP Home Buyers Plan to $25,000 from $20,000 providing first-time home buyers with additional access to savings to purchase or build a home.
The eligibility and repayment rules remain pretty much the same. The money withdrawn from the RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status. The repayment period starts the second year following the year the first withdrawals were made. If a participant pays less than the scheduled annual payments, the amount that they don’t repay must be reported as income on their tax return for that year.
For example, in October 2009 a first time buyer withdraws $24,000 from his or her RRSP to finance the purchase of a home. Their first annual repayment of $1,600 ($24,000 divided by 15 years) is due by December 31, 2011
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Great information, especially important for first time buyers who may fail to factor in these changes into their budget when looking at property. You also bring up a interesting point on how there are many government programs to help with large purchases, such as property, something which I think many buyers fail to realize and take advantage of.
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