The RRSP Home Buyers' Plan remains one of the most useful tools for GTA first-time buyers who've been diligently saving, but the repayment rules trip up more buyers than the withdrawal rules do.
How Withdrawals Work
Eligible first-time buyers can withdraw savings from their RRSP tax-free to put toward a down payment, provided the funds have been in the account for the required holding period and the purchase meets program eligibility rules.
The Repayment Timeline
Withdrawn funds must be repaid to your RRSP over a set number of years, and missing an annual repayment gets added to your taxable income for that year, a detail many first-time buyers overlook.
- Confirm your specific withdrawal limit and repayment schedule with a financial advisor before you commit to using the HBP
- Set a calendar reminder for your annual repayment deadline to avoid an unexpected tax hit
- Consider combining HBP withdrawals with FHSA savings for a larger combined down payment
Next step
Numbers can be intimidating, you don't have to run them alone. Contact Hamodi Realty for a personalized affordability breakdown and a referral to trusted local mortgage professionals who know the GTA market inside and out.