Using RRSP for downpayment for first time homebuyer.-

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Hi there,
I have some questions regarding the use of an RRSP to come up with a =
downpayment for your first home.
1. How much of a refund do you get back when you cash out your RRSP for =
a downpayment on your first home?
2. Is there a maximum amount you can cash out?
3. If you are buying the residence with a common law spouse, can you =
both cash out your RRSPs and receive the same benefits or can only one =
person of the couple do this?
4. How long do you have to pay yourself back this money and what is the =
penalty for not paying it back?
5. How long do you have to have had money in this RRSP before you can =
cash it out for a home?
6. Can I contribute to a RRSP while working in the US on a TN visa =
without adverse tax effects?
david ingram replies:
1.    There is no refund when you withdraw to buy a first time house =
under the homebuyers plan.  Under the homebuyer's plan, you do not =
"cash" it out, you borrow from the plan.  If you were to cash in the =
plan, you would have to pay 25 to 44% tax of the amount you take out.
2.    There is no maximum to the amount you can cash out and pay tax on. =
 There is a maximum of $20,000 that you can borrow tax free or tax =
deferred from your plan.
3.    You can both borrow up to $20,000 from your RRSP accounts to use =
to purchase the houose, pay legal fees, furniture, landscape the yard, =
etc. =20
4.    The money has to be paid back to the RRSP over a 15 year period.  =
In other words, ifyou took out an exact $15,000, you would have to put =
$1,000 a year back into the plan to avoid tax.  If you did not pay the =
$1,000 back, you have to add it to you8r income and would have to pay =
from $240 to $440 tax on it.  The $1,000 (or 1/15th of what you took =
out) would be added to the top of your other income and theoretically =
would be taxed at your highest marginal tax rate.
5.    It should be in for 90 days or more.
6.    Yes but you likely should not.  19 out of 20 TN holders should =
"not" be paying any Canadian Income tax and therefore an RRSP =
contirbution would not be deductible against anything and would be =
taxable when you take it out.
Read the Home Buyers Plan booklet at:
BEFORE you proceed and make sure that whoever you talk to understands =
what you are doing.
For instance, if your common-law spouse owned a house in the last four =
years but before you were living together, you can participate but she =
cannot.    And, if she had a share in a house with an ex husband and it =
was not sold until after the two of you were living together, than =
neither of you can participate.  Sounds like you need an individual =
consultation with the both of you (in person or by phone).  I say this =
in particular because of the TN visa amd US tax return complication.
Answers to this and other similar  questions can be obtained free on Air =
every Sunday morning.
Every Sunday at 9:00 AM on 600AM in Vancouver, Fred Snyder of Cartier =
Partners and I will be hosting an INFOMERCIAL but LIVE talk show called =
Those outside of the Lower Mainland will be able to listen on the =
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Local phone calls to (604) 280-0600 - Long distance calls to =
Old shows are archived at the site.
Fred Snyder and I are giving free seminars on making your CANADIAN =
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david ingram
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Disclaimer:  This question has been answered without detailed =
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