New Changes To Home Buyer’s Plan: Using Your RRSP For Down Payment After A Separation

By: Greg Syrota Team

New Changes To Home Buyer’s Plan: Using Your RRSP For Down Payment After A Separation

Tags: New Changes To Home Buyer’s Plan: Using Your RRSP For Down Payment After A Separation

 

You may already be aware of the Government’s Home Buyer’s Plan where a first time home buyer can use up to $35,000 for a down payment on a property. The Home Buyer’s Plan can also be used for those who have not owned a home in 4 years as they are considered first time home buyers.

Starting January 1st 2020, home buyer’s who have separated from their spouse or common-law partner can be considered as a first time home buyer and can use their RRSPs to either buy a new home or buy the matrimonial home from their ex-partner under certain conditions:

If the individual owns and occupies a home that was the individual’s principal place of residence at the time of the withdrawal, either:

OR

AND

This may be a great relief for Canadians in the process of separation who need access to their retirement funds in order to buy a new home or their matrimonial home as separating is stressful enough without the thought of where one is going to live.
When conditioning this option, the same rules do apply that you must pay your RRSP back within a 15-year timeline, with a minimum contribution of one 15th of the total amount made each year. If you fail to make your annual contribution, that portion of funds are earmarked as income, and you’ll be taxed on it at your full rate.