Personal Taxation Q 'n A

I borrowed money from my RRSP this year to buy a home. What do I do now?

You are allowed to remove up to $25,000 from your RRSP without attracting any tax for the purposes of purchasing a home, provided you have not occupied another home you owned in the previous five years. There are special rules for individuals with disabilities and relatives who support them. Beginning no later than the second year after the withdrawal of the funds the amount taken out of your RRSP must be repaid in sums over 15 years. The amount to be repaid is the remaining balance divided by the remaining years left to repay. There is no loan payment as such, but simply an adjustment to your RRSP contributions made for the year. If you do not make any RRSP contributions for the year, you will be required to report that year’s required repayment as income on your tax return. Please see CRA's page for Home Buyer's Plan for details.