Can I use money from my Registered Retirement Savings Plan (R.R.S.P.) to purchase a home?

It is my understanding that:

  1. if you are a first time home buyer or if you have not owned a home in the last five (5) years; and
  2. if the home will be your principal place of residence in Canada; and
  3. if the funds have been on deposit in your R.R.S.P. for at least 90 days,

then a purchaser can borrow up to a maximum of $20,000.00 from his or her R.R.S.P (i.e. a husband and wife could borrow a total of $40,000.00) and that these funds may be applied towards the purchase of a home. After an initial grace period of two full calendar years (plus the balance of the year in which the withdrawal occurred) you are required to pay back the funds borrowed over a period of 15 years by depositing, on a yearly basis, a minimum of 1/15th of the amount withdrawn back into your R.R.S.P. If you do not make a payment of a minimum of 1/15th of the amount withdrawn in any given year then the amount will be included in your taxable income for that year and will be subject to payment of applicable income tax.

Please note that government policies are subject to change. Accordingly, the above is a guideline only. You must speak with your branch of the bank or with Revenue Canada in order to obtain the most accurate and up-to-date information.