View Full Version : Hey guys.. I need like.. financial help
11-07-2002, 06:26 AM
No I don't mean I need money.. tho more is always nice.
I'm hoping to buy a house in the next year or two and have been saving money for a down payment. My X girlfriend who is taking accounting at OUC says that the federal gvmt has some sort of deal going on that basically states:
"A first time home buyer can take up to $2x,000 out of RRSP's to use towards a down payment without incuring tax penalties. The money taken out of RRSP's must be put back in within 15years or the tax penalties will kick in".
Does anyone know anything about this? Seem like a good route to go?
85 GMC 3/4T 4x4
7" BDS suspension lift
35" Mickey Thompson Baja Claw Tires
Dual fuel propane/gas
Locked rear axle
Smiley face painted on diff cover
11-07-2002, 12:33 PM
I used the scheme last year. And I'm an accountant. Whaddya wanna know about it?
From memory so don't take this to the bank.
Basically, if you have money in your rrsp (and it has to have been in ther for 91 days or more), you withdraw the money without having to include it as income in the current year. You must buy a house with it and there are time restrictions between when you take it out and have bought the house. The first year, you don't have to pay anything back. Then each following year you must pay 1/15th back to your RRSP. If you don't pay it back, you will need to report income of the 1/15th in that year and pay tax on it.
As well, it was $20,000 per homeowner so my wife and I both being on title, we could use $40K (if we had it). I used the minimum I could to get into the house and would "suggest" you leave as much of your RRSP alone as possible.
Now, in the past year, I figure my house has gone from the $150K I paid to maybe $180 (including many improvements that cut into fishing time). No way did my mutuals come close to that gain in the last 18 months.
It is a good deal an, when worked with the CMHC rules, should allow most people to get into a house.
11-07-2002, 01:55 PM
Awesome! Thanks Tacklewasher, you're always helping me out.
I only have 1 question for you:
Why would you reccomend I leave as much of my RRSPS's alone as possible? I mean, won't the intrest I pay on the mortgage outweigh the intrest that I'd get from the RRSP's?
Edited by - 85_GMC_4x4 on 11/07/2002 3:57:23 PM
11-07-2002, 02:03 PM
This is kinda a tough question and, somewhat, has a lot to do with your saving ability or nature. If you are prepared to make the same payment either way, just splitting them between RRSP and mortgage, then you MAY be correct. Too often (and I am a prime example) the mortgage is something you HAVE to pay and the RRSP gets relagated to post-beer money (or in my case, after fishing stuff money, I really don't drink THAT much). In this case, better to have your "Geez I gotta pay this" amount higher and leave the money to grow in your RRSP. If you are more careful than me, then it all depends on interest earned on investments vs mortgage interest. I'm actually pretty bullish on money put in investements right now as the markets CAN'T get much lower and there COULD be a good return on money put in RRSP's right now. That is my opinion only and I suggest you talk to someone who doesn't have his head up his ass on the investing topic (I ain't done good lately).
11-08-2002, 04:03 AM
I agree with Tacklewasher about leaving as much as possible in the RRSP - it is our nature to spend it rather than save it. Over the long term, the more you can get it in your head to leave that RRSP alone, the better off you will be. And the market is prime to buy more - buy buy buy when the market is so low. It can't get much worse! So use what you have to take out of the RRSP wisely and then put as much back in as you can afford, more than the 1/15th if you can. Just my opinion.
11-08-2002, 07:40 AM
OK! I understand.. Yeah, I'm bad for spending the money on my toys instead of saving it for when I get old and need different toys.. like a new hip and a roof over my head..
Thanks for the advice and info!
11-08-2002, 11:26 AM
Did you ever get your tranny fixed?
11-08-2002, 01:09 PM
Well, I flushed the fluid and changed the filter and the tranny is now working... for how long I have no idea.. but I don't think it's going to last long. Insurance runs out Dec 4th, planning a rebuild or a swap for the holiday season.
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