COVID-19 Update — To assist in our community’s collective effort to combat COVID-19, our physical offices are operating on a restricted basis. Although we are limiting attendance at our office by both firm members and clients, we remain otherwise fully operational and look forward to continuing to provide the highest level of legal services to our clients. Read our full response notice here.

First time homebuyers beware – withdrawals from your registered retirement savings plan (RRSP) may be taxable. A recent Toronto news article described a situation in which a first time homebuyer withdrew money from her RRSP’s without first declaring to her bank that she was a first time homebuyer – she received a $5,000 tax bill.

To avoid making the same mistake, first time homebuyers who plan to withdraw money from their RRSP’s for a home down payment should consult Canada Revenue Agency’s (CRA) website, specifically the Home Buyers’ Plan (HBP). The HBP allows a first time homebuyer to withdraw up to $25,000 from their RRSPs in a calendar year to buy a qualifying home without triggering income tax liability on the withdrawn amount. Generally, all withdrawals have to be repaid within a period of no more than 15 years. A first time homebuyer has to repay at least a prescribed minimum amount to their RRSPs each year until their HBP balance is zero. If the minimum amount is not repaid in a given year, it will be included in their income for that year.

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2 St Clair Ave West
Suite 1700
Toronto, ON M4V 1L5

Phone: (416) 863-0125

Fax: (416) 863-3997

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