Thursday, October 28, 2021 02:45


Q. Why Should I use the Home Buyers’ Plan over Non-Registered Savings?

A.  The answer to that question is that RRSP savings give you two benefits. When you contribute to a RRSP you receive an immediate personal tax deduction. For example if you were to contribute $10,000 to an RRSP and your gross annual income was about $50,000 a year you would reduce your tax liability by about $3000. That $3000 is really additional savings towards your down payment. So I think the advantage of RRSP savings toward a down payment for a first home relates to the immediate tax deduction as well as the ability to withdraw under the Home Buyers Plan – tax free and interest free.