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The biggest issue with contributing to an RRSP too early is the need down the road to withdraw the money for expenses other than retirement that come along, says expertsCan you use the Home Buyers’ Plan to buy a foreign property?
– moneysense.ca
I am looking to use my RRSP to buy a vacation property in Portugal. How much can I take out tax free?—Andy
Tax implications of buying property in another country
I think you are referring to the Home Buyers’ Plan (HBP), Andy, when you ask about a tax-free registered retirement savings plan (RRSP) withdrawal. The HBP allows a tax-free withdrawal from your RRSP if you are a first-time home buyer purchasing an eligible home. HBP participants can withdraw up to $35,000, as can their spouse or common-law partner, for a total of $70,000.
You are considered a first-time home buyer if neither you nor your spouse or common-law partner owned a home that you occupied in the current year or the four previous years. However, in order for a property to be considered a qualifying home, it must be located in Canada. So, your Portuguese vacation property is not going to qualify for the HBP.
If you were to withdraw from your RRSP to buy this property, Andy, the withdrawal would be added to your other income for the year and be fully taxable…
