Spousal RRSP and HBP

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metallurgy
Member since: Oct 10

Posts: 72
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Post ID: #PID

Posted on: 04-01-12 13:01:06

Can anyone tell me that if I can withdraw money contributed towards spousal RRSP before 3 years under Home buyers program or not?

I have contributed to my own RRSP to the maximum limit (i.e. to the amount which I can withdraw under HBP) and I have still lots of room available in my own RRSP. But I do not want to invest in my own RRSP, because that money I cannot withdraw under HBP.

This year (i.e. 2011) I want to contribute to RRSP to save some taxes. I am planning to invest in Spousal RRSP, as my spouse hasn’t contributed to the maximum limit which she can withdraw under HBP. The reason behind investing in spousal RRSP is that I am always at higher income level than my spouse.

Now my question is can I withdraw money contributed towards spousal RRSP before 3 year under HBP or not?
Has anyone of the fellow CD’s done it in the past?

Thanks a lot in advance.

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 04-01-12 19:15:18

Quote:
Originally posted by metallurgy

Can anyone tell me that if I can withdraw money contributed towards spousal RRSP before 3 years under Home buyers program or not?

I have contributed to my own RRSP to the maximum limit (i.e. to the amount which I can withdraw under HBP) and I have still lots of room available in my own RRSP. But I do not want to invest in my own RRSP, because that money I cannot withdraw under HBP.

This year (i.e. 2011) I want to contribute to RRSP to save some taxes. I am planning to invest in Spousal RRSP, as my spouse hasn’t contributed to the maximum limit which she can withdraw under HBP. The reason behind investing in spousal RRSP is that I am always at higher income level than my spouse.

Now my question is can I withdraw money contributed towards spousal RRSP before 3 year under HBP or not?
Has anyone of the fellow CD’s done it in the past?

Thanks a lot in advance.

The answer is that your spouse is the annuitant for your spousal RRSP and only your spouse can withdraw from that RRSP under HBP if the funds have been in the spousal RRSP for over 89 days.

I have done it for a couple of my clients when I did their mortgages as it increased their tax refund amount.

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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

metallurgy
Member since: Oct 10

Posts: 72
Location:
Post ID: #PID

Posted on: 05-01-12 11:41:44

Thank you very much Pramodji for prompt reply. That means if me and my spouse will buy a property jointly, we can withdraw the money invested in spousal RRSP under HBP and also take advantage of tax saving this year. Am I correct?

I have been confused by some Accountant, who advised me that I cannot withdraw money invested in Spousal RRSP under HBP before 3 year.

Pramod Chopra
Member since: Sep 03

Posts: 1284
Location: Pickering, ON
Post ID: #PID

Posted on: 05-01-12 14:47:35

Quote:
Originally posted by metallurgy

Thank you very much Pramodji for prompt reply. That means if me and my spouse will buy a property jointly, we can withdraw the money invested in spousal RRSP under HBP and also take advantage of tax saving this year. Am I correct?

I have been confused by some Accountant, who advised me that I cannot withdraw money invested in Spousal RRSP under HBP before 3 year.

Yes, that's right. Your spouse would be able to withdraw funds form the spousal RRSP of which he/she is the annuitant and you will get the tax benefit. However, please understand that you can contribute to your spousal RRSP only if you have the contribution room as it is counted towards your contribution room and not towards your spouses contribution room. May be the accountant you talked to did not realize that funds withdrawn from spousal RRSP under HBP before 3 years not attributed to the contributing spouse.

-----------------------------------------------------------------

Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada

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