How can RRSPs help with Home Ownership
What is an RRSP?
An RRSP is an account designed to help Canadians save for retirement on a tax-sheltered basis (the income earned in an RRSP is not taxed until it is withdrawn).
How do you set up an RRSP?
Canadians can set up an RRSP through a financial institution, such as a bank, credit union, trust or insurance company. A financial institution will advise your clients on the types of RRSPs and the investments they can contain. Learn more about how your clients can set up an RRSP.
How can RRSPs help with homeownership?
According to a 2016 TD Bank survey, more than 30% of young Canadians were “not at all knowledgeable” about retirement savings plans, including half of respondents who did not know RRSPs could be used to help purchase a first home.
You have the tools available to educate your clients, particularly young Canadians, about the importance of RRSPs and how RRSP funds can be used to help transition to homeownership through the Home Buyers’ Plan (HBP).
The HBP allows first-time homebuyers to withdraw up to $25,000 from their RRSPs to use towards the purchase of a home. The repayment period starts two years after the funds are withdrawn, and one fifteenth of the withdrawn funds need to be repaid each calendar year or it will be taxed as income.
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