Questions on First Time Home Buyers RRSP

[Ca_Silvia13]

I've tried searching online but i only find info on current landlords purchasing. My question is, I'm building a TH and used my FTHBP/RRSPs to put my 5% down.

Do i have to live in the property or once the TH is built can i just rent it immediately?

[ercchry]

technically with just being an insured property (under 20% down) you have to live in it... your mortgage docs will probably even state that somewhere... but, people's lives change all the time ;)

[Ca_Silvia13]

I haven't sign a mortgage yet so i can't check those documents.

What about if i declare it residence for 1 month, then rent it?



I know there is lots of landlords on here so hoping for some clear direction.

[ercchry]

there are a lot of people that just straight up rent it out from the get go. not sure about the legalities of it... but for me personally i've never done this. normally im there at least a year before i rent it out.

[jaeden]

According to this:

CRA website (http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/prncpl-eng.html)

You have to intend on occupy the home as your principal residence. There is a slight difference between "intending to" and actually residing in the home.

[skandalouz_08]

Originally posted by jaeden
According to this:

CRA website (http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/prncpl-eng.html)

You have to intend on occupy the home as your principal residence. There is a slight difference between "intending to" and actually residing in the home.

It's exactly this. There is no set in stone amount of time you have to occupy it for before you rent it out. That being said, if the CRA were to audit you and dig deep and they find that you never had any intentions to occupy as your principal residence I believe the only thing that would happen is you would be taxed on the withdrawal from the RSP (plus interest?).

[Tik-Tok]

Originally posted by skandalouz_08

I believe the only thing that would happen is you would be taxed on the withdrawal from the RSP (plus interest?).

Because defrauding the government out of money never comes with a higher penalty :rofl:

[Ca_Silvia13]

My intent was to certainly live there, then i had another baby and now the house is too small. I feel that would justify the change in living arrangements.

Thanks guys

[skandalouz_08]

Originally posted by Tik-Tok


Because defrauding the government out of money never comes with a higher penalty :rofl:

I'm sure the government could throw whatever penalty they want at you but that would be the minimum penalty you should expect imo.

[16hypen3sp]

There is a form you have to complete in order to pull it out. On the form there are questions and one is about living there. Either you have to live there, or a disabled relative has to live there. But yes, I don't remember seeing a time frame involved before you can rent it out.