Posted in The most common question I get is, 'Can I participate in both?'. The answer is yes!
Let's say you have $8K in an RSP from contributions you made years ago that you want to withdraw under the HBP to use towards a down payment. Terrific! For this withdrawal, there is no tax penalty to doing so, no repayments are required for the first two years, after which you have to recontribute at least 1/15 of the funds withdrawn annually to your RSP (until it is paid back) OR you can include that amount on your taxes as income for that given year.
The part most people (including advisors) don't understand is you can take that same $8,000 you just withdrew from your RSP, open a FHSA (First Home Savings Account), deposit the funds, and then withdraw it right away! I know it doesn't make intuitive sense, but what this will give you is not only a great tax break the next year, but you NEVER have to repay the funds. How great is that?
To find out more about how I can help you take advantage of this and other strategies to help get you into a home, give us a call at (613)394-5810 or send a message today, as we'd be honoured to have the opportunity to earn your business.
