Treat Yourself: Let Revenue Canada help pay for your home
Why not let Revenue Canada help pay for your home?
Keep in mind, the dollar amount has been stuck at $25,000 since 1999 while house prices have continued to escalate. That $25,000 Ottawa allows you take out of your retirement fund to buy your first home sure doesn’t go as far as it used to. At $50,000, you’re barely making the minimum down payment if you are buying a home in any large Canadian city with a mortgage backed by the government. Note: The Canadian Real Estate Association says the average price of a home will climb to $450,000 next year, meaning that $50,000 is just over 10% down and not enough to avoid costly mortgage default insurance.
For young Canadians it may be the best alternative to getting into the real estate market. Paying the money back over 15 years is better than borrowing from parents, or a bank in most cases!
If you know you are buying your first home in the next 90 days, and you have the RRSP room, making a $25,000 contribution (or $50,000 for two people) ♥ could mean a big tax refund in April ♥
Talk to your accountant about your tax bracket and what this return could look like! Remember, the $25,000 has to be in the plan for 90 days before you can take it out.
Note: Some lenders in Canada require your RSP Homebuyer Withdrawal repayment be used in your calculation for qualifying for the mortgage, so make sure to have your pre approval in place so there are no worries or surprises with using these funds.
This may sound like a good idea to you, but can also come off a little confusing. Give me a call and we can discuss how Revenue Canada can help pay for your home!