First Time Home Buyers and RRSP’s

First Time Home Buyers and RRSP’s

On a monthly basis, I strive to provide the public with relevant content and information that they can use to assist them in their search for their homes. This month is no different, but the focus is towards first-time buyers. Specifically, first-time buyers who have been saving money for years and contributing to an RRSP or Registered Retirement Savings Plan.


As a First Time Home Buyer, you can use up to $25,000 from your RRSP without paying any personal taxes. The only major stipulation is, is that it needs to be paid back in full in order to avoid paying taxes on it. The most confusing part of this process is trying to figure out if you qualify for the program. You think it would be super simple but, it is a little tricky. You are considered a first-time homebuyer if:


  • Within the last 4 years previous to your purchase you did not live in a home that you or your current spouse or common-law partner owned. even if the house where you live is not in your name but your spouse or common-law partner – it may prevent you from qualifying.


Some of the conditions you must meet to qualify are fairly standard and most people understand them. The conditions are:


  • You must be a Canadian resident at the time of withdrawal
  • You must have received all of the withdrawals in the same calendar year
  • $25,000.00 is the maximum amount you can use
  • Only the owner of the RRSP can receive this money
  • You typically cannot withdraw funds from a locked-in RRSP or a group RRSP
  • The money you plan on using must be housed in your RRSP account 90 days previous to the withdrawal


Don’t worry though; you won’t need to pay it back in 1 or 2 years or anything crazy like that. A new home buyer utilizing the New Home Buyer Plan will have up to 15 years to repay the money that you borrowed for your down payment back to your RRSP’s.   But don’t let the timeline hold you back from paying back the full amount to your RRSP at any time you see fit.


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