Does RRSP withdrawal have to go to the down payment? Or can it cover monthly payments afterwards instead?
Hi there! My wife and I are considering purchasing a place in the near future, but I've been putting all my savings in TFSA so far instead of RRSP (I expect higher income in the next ~5 years, and I've been trying to maximize tax savings). I just learned though, that for an RRSP withdrawal towards a first time home purchase, funds must have been in the RRSP for at least 90 days. I'm reluctant to go and put $35K into my RRSP now though, because it's possible a deal for us will close before then. If that happens, I'd need those funds. Would I be stuck paying tax for withdrawing it in that case? I'd need those funds to go towards the down payment.
Or, could I start contributing smaller amounts monthly to my RRSP, roughly equivalent to what the mortgage payment will be, then roll those funds back out again 90 days after each deposit, to pay the mortage payments? Is that allowed? Or does it have to go towards the down payment at the time of purchase?
Or... should I just use my TFSA money towards the down payment (which I understand results in me freeing up that same amount to contribute back into my TFSA at any point in the future), and realize the tax savings of my RRSP contributions later when I'm earning a higher income?
My wife's money has been in RRSP funds long enough thankfully, so it's not a concern for her.
Seems like I should have been more on top of this and transferred over the $35K maximum into RRSP to get the tax credit and put it towards the down payment. I'm worried I may be missing that boat.
Any input?
Or, could I start contributing smaller amounts monthly to my RRSP, roughly equivalent to what the mortgage payment will be, then roll those funds back out again 90 days after each deposit, to pay the mortage payments? Is that allowed? Or does it have to go towards the down payment at the time of purchase?
Or... should I just use my TFSA money towards the down payment (which I understand results in me freeing up that same amount to contribute back into my TFSA at any point in the future), and realize the tax savings of my RRSP contributions later when I'm earning a higher income?
My wife's money has been in RRSP funds long enough thankfully, so it's not a concern for her.
Seems like I should have been more on top of this and transferred over the $35K maximum into RRSP to get the tax credit and put it towards the down payment. I'm worried I may be missing that boat.
Any input?