RRSP’s and First Time Buyers

Q. Over the past four years, my wife and I have contributed to our RRSPs. Soon, we plan to purchase our first home. Is this a good time to buy or should we wait another year or two?  Can we withdraw the maximum $20,000 under the Home Buyer’s Plan?
– Sondeep

A. The Canadian real estate market continues to show sale and price declines.  Although most experts do not expect a U.S.-style meltdown, a significant price reduction is expected. Regardless of which  province in that you live, real estate agents advise sellers “realistic pricing is key to selling your home.”  If you plan to live in the home, real estate will always be a good investment.

See Latest Calgary Market Update Here

Our federal and provincial government has made several initiatives to stimulate the economy and the housing sector. Many recent changes in the federal budget are excellent incentives for all homeowners and first-time buyers.

First-Time Home Buyers:
• New-increase!  The RRSP Home Buyers Plan withdrawal limits per individual have increased to $25,000 from $20,000, effective Jan. 27, 2009.

• New-tax credit!  After Jan.  27, 2009, homebuyers that have not owned a home in the current year or four preceding years may qualify for a $5,000 non-refundable tax credit.

Existing Homeowners:
• New-Renovations! Families that undertake renovations or alterations between Jan. 27, 2009 and Feb. 1, 2010 to their principal residence may qualify for a 15 per cent non-refundable tax credit. Cost of renovations must be greater than $1,000 and up to $10,000.

These are giveaways, check with your tax adviser/accountant.

Original Article Here by- Henry Choo Chong