"If you plan on taking advantage of the RRSP Home Buyers' Plan, there are some important details to consider," says Chartered Accountant Glenn Lott, Partner at Lott & Company, Chartered Accountants, in Markham.
"If you're buying your first home you can withdraw up to $20,000 from your RRSP. But you'll need to have the $20,000 in your RRSP at least 90 days before making that withdrawal. So, be sure to make any additional contributions to your RRSP prior to making your Home Buyers' Plan withdrawal.
"Consider deferring repayment of Home Buyers' Plan withdrawals if you have a low income year (for example, you're on maternity leave or collecting employment insurance). If the required Home Buyers' Plan repayment is not made, the amount of the required repayment is subject to income tax in the year. If your spouse is in a higher tax bracket, have your spouse use this money to make an RRSP contribution. The tax savings on the spouse's contribution will exceed the income tax paid on the Home Buyers' Plan income."
Courtesy of the Institute of Chartered Accountants of Ontario