Home Buyers' Plan RRSP Withdrawals in Newfoundland and Labrador

If you have money in an RRSP, you may be able to use it toward a down payment on a home in Newfoundland and Labrador.

This article covers the withdrawal limit, how the plan works with a First Home Savings Account, and how it differs from other first-time buyer help. Because eligibility and repayment rules are set by the Canada Revenue Agency, check current guidance or speak with an accountant before you take money out.

This article covers the law of Newfoundland and Labrador.

What the Home Buyers' Plan allows

You may withdraw up to $60,000 from RRSPs toward a qualifying home. The money is meant for the purchase, so plan the timing around your closing date and your lender's requirements.

Amounts above $60,000 withdrawn under the plan are reported as income. That can raise your tax bill, so avoid going over the limit.

Combining it with an FHSA

You can combine a Home Buyers' Plan withdrawal with a qualifying First Home Savings Account withdrawal for the same home. FHSA contributions are capped at $8,000 a year and $40,000 lifetime.

Using both can increase what you have for a down payment. How the two interact for your own situation is worth confirming with an accountant.

Eligibility and repayment

The Home Buyers' Plan has its own eligibility and repayment rules, set by the Canada Revenue Agency. They cover who counts as a first-time buyer, when the home must be bought and how the withdrawn amount is paid back to your RRSP. Confirm these on the Canada Revenue Agency's current guidance or with an accountant before you withdraw, because missing a requirement can have tax consequences.

Do not confuse the plan with the Home Buyers' Amount. That is a separate non-refundable federal credit based on up to $10,000 for a qualifying home, claimed on line 31270. It has its own tests, including that you intend to occupy the home as a principal residence within one year of acquisition.

Other help and costs to plan for

The GST/HST rebate covers new or substantially renovated homes and not resale homes. The Home Buyers' Amount is a federal credit only, with no refund if no tax is payable.

Newfoundland and Labrador has no land transfer tax, but registering your deed and notice of mortgage carries a land registration charge. Include it in your closing budget.

What to do next

• Add up your RRSP balances and any FHSA to see what you could use.
• Keep any withdrawal within the $60,000 limit.
• Confirm the eligibility and repayment rules with the Canada Revenue Agency or an accountant.
• Tell your lender and lawyer that part of your down payment comes from an RRSP.
• Plan for registration charges and other closing costs.

Your lawyer can explain how the funds fit into the closing, but tax questions about the withdrawal belong with an accountant.

Frequently asked questions