My question is: Canadian-specific QUESTION: We have returned from living in the US for the past seven years. We want to buy a house in B.C. and would like to use our RRSP's. Can we do so without being taxed on them?? Thank you for your information. ---------------------------------------------------------------------------david ingram replies;
Generally, before you can withdraw funds from your RRSPs to buy or build a qualifying home, you have to meet the first-time home buyer's condition. If you are a person with a disability, or you are acquiring a home for a related person with a disability or helping such a person acquire a home, you may not have to meet this condition. Please refer to the section called "Exception to the first-time home buyer's condition".
You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.
If at the time of the withdrawal you have a spouse or common-law partner, it is possible that only one of you will be considered a first-time home buyer (see example 1).
Example 1
In 2004, Paul sold the home he had
occupied as his principal place of residence for five years. He then
moved into a rented apartment. In 2004, he met Jane and she moved in
with him. Jane had been renting her own apartment, and had never owned
a home.
Jane and Paul were married in August 2007. They wanted to withdraw funds from their RRSPs to participate in the HBP in September 2007. Since Paul owned and occupied his home during the period beginning January 1 of the fourth year before the year he wants to make the withdrawal, he is not considered a first-time home buyer, so he cannot participate in the HBP in 2007. Paul will be able to participate in the HBP in 2009, as he will not have owned a home that he occupied as his principal place of residence since January 1, 2005.
However, Jane is considered a first-time home buyer, since she never owned a home, and she did not live with Paul during the period in which he owned and occupied his home as his principal place of residence. She can participate in the HBP in 2007, providing all the other requirements are met.
If Jane does not participate in the HBP in either 2007 or 2008, Paul can participate in the HBP in 2009. If they want to participate together in the HBP, they both have to wait until 2009 at which time they can withdraw funds under the HBP to buy or build a qualifying home.
Comments (0)
CEN-TA Cross Border Services - Tax, Visas, Immigration
http://www.centa.com/article.php/CanWeekofMon20080512000764.html