If you have a registered retirement savings plan and are about to purchase a home, you may be able to borrow from the RRSP to assist with the financing.  If you do, you will be required to repay the loan over a maximum fifteen year period.  The maximum amount of the loan is $20,000 per person, so two spouses may be able to access a total of $40,000.  The home buyers plan is for first time home buyers only and you must have entered into a written agreement to purchase or build a home before you access the RRSP funds. There are many other hoops to jump through before you can qualify for a HBP loan, but the Canada Revenue Agency has an Information Bulletin (RC4135(E)) which is very comprehensive.

For those of you, who already have borrowed from your RRSP to purchase a home, remember that the 2006 repayment must be made no later than March 1, 2007.  The repayment may be taken from a normal RRSP contribution, which will reduce your deduction, or it may be made as a separate payment. If you do not make this repayment, a minimum of one fifteenth of your original loan will be included in your 2006 income and taxed at your marginal rate.

Please contact your accountant at Harvey, Lister & Webb Incorporated to discuss the possibilities.

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