18 October 2010

It’s necessary to know that in order to qualify the RRSP funds must be on deposit for at least 90 days.
The most interesting thing is that even if you do have money for your down payment, it still may be a good idea to use the RRSP strategy.
Let’s see how it works. If you have $25,000 for your down payment and you still have the possibility to contribute this sum to your RRSP, you can move these savings into a registered investment (of course, it should be done at least 90 days before the closing date). And then you can just withdraw the money through the Home Buyers’ Plan.
What’s the benefit you may ask? The deal is that in this case your $25,000 RRSP contribution will count as a tax deduction this year – so you will save some money.
But there’s one thing you should always remember: using RRSP for a down payment can help you buy a home sooner, but you may also lose in case of some tax-sheltered growth.
That’s why you should consult your financial advisor to see if this strategy is good exactly for you.