Owning your first home is possible…
You can make your dream of owning your first home a reality sooner than you may
think with the Home Buyers’ Plan and smart tax planning. The Plan lets you use
your RRSP savings (even if you don’t currently have any), towards the down payment
on your first home, tax-free and without paying a penalty.
To ensure you do not pay tax on your RRSP withdrawal under the Home Buyers’ Plan, you must repay the withdrawn amount
to your RRSP within 15 years. Repayments will begin in the second year following the year that the funds were withdrawn.
With the Continuous Savings Plan from BMO Bank of Montreal®, repaying your RRSPs is convenient and manageable with
monthly installments.
Contact me at any time for more information or take advantage of the Home Buyers’ Plan! Additional details are also
available at www.cra-arc.gc.ca/tax/individuals/topics/rrsp/menu-e.html. Owning your first home is closer than you think!
The following example is based upon unused RRSP contribution
room of $20,000 each plus a 35% tax bracket for you and your spouse or common-law partner, assuming you’re both
eligible for a tax refund and you’ve saved $7,500 for a down payment on a $150,000 first home.
What Is the Home Buyers’ Plan?
The Home Buyers’ Plan is a Government of Canada
program designed to help Canadians buy their first home.
Under the Plan, you and your spouse or common-law
partner can each withdraw up to $20,000 from your
RRSP to help build or buy the same first home. For
example, you and your spouse or common-law
partner can each withdraw $20,000 for a combined
total of $40,0001.
If you don’t have $20,000 to contribute to your RRSP,
but you’ve saved the minimum down payment for a
home, you can borrow funds2 to take advantage of the
Home Buyers’ Plan and receive the benefits of a tax
refund. You can use the refund to increase the down
payment on your first home. If you time your contributions
right, you may be eligible to receive a tax refund in
the same year you withdraw the funds under the plan.
Your contributions must be within your eligible RRSP
contribution limit.
STEP 1. Have your $7,500 down payment savings
readily available.
STEP 2. You and your spouse or common-law partner
each get a BMO Bank of Montreal® RRSP loan
for S20,000.
STEP 3. Use the loan to contribute $20,000 each to your
RRSPs. These RRSP contributions must be made
by February 29th, 2008 in order to claim them
on your 2007 Income tax returns.
STEP 4. File your 2007 income tax returns as soon
as possible and claim3 your respective RRSP
contributions.
STEP 5. Based on 35% tax brackets and $20,000 each In
contributions, you and your spouse or common-law
partner will receive income tax refund returns of
approximately $7,000 each, for a total of $14,000.
STEP 6. 90 days after making your contribution,
withdraw your RRSP funds through the Home
Buyers’ Plan program.
STEP 7. Now you and your spouse or common-law partner
have S61,500 (S14,000 tax refund + $7,500 down
payment savings + $40,000 Home Buyers’ Plan
withdrawal) to use towards a down payment on
your first home.
Funds need to be in the RRSP for 90 days before it can be withdrawn from the
Home Buyer’s Plan. RRSP loan is subject to credit approval. Your account with
Canada Revenue Agency has to be in good standing to qualify for a refund.
®Registered trade-marks of Bank of Montreal.
Mortgage Expertise
at Your Doorstep 24/7
Your Mobile Mortgage Specialist:
Nick Dimulkas, AMP
BMO Mortgage Specialist
BMO Bank of Montreal
Phone: (416) 590-7933
Port Credit Real Estate
Beautiful Port Credit real estate for sale is a rare commodity and you should be aware of the opportunity to buy in Port Credit. Its exclusive location on the shores of Lake Ontario and its excellent quality housing stock make it prime real estate for living and for investment. If you're interested in Port Credit real estate, send an email to Damir. When opportunities come available, he can contact you.
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