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[00:00:00] First time homebuyers. Are you planning on buying your first home in three to six months? What should you be doing right now? [00:00:07][6.7]
[00:00:11] You're listening to the bone nosed real estate podcast. Tips and advice for home buyers, sellers and owners with award winning Remax agent Bo Kauffmann. [00:00:21][10.2]
[00:00:26] These days, homebuyers plan well in advance. So if you're a first time homebuyer thinking of buying your first house or condo in three months or longer from now, here's something you should consider doing right now. [00:00:38][11.5]
[00:00:38] Put as much of your savings, which is earmarked for your downpayment, into an RRSP. Now to see how much you can put in check last year's notice of assessment from the CRA. Look for the line probably on the last page which says something like “your available RRSP contribution limit for such and such a year is…” So it might tell you. Let's say you have $15,000 worth RRSP contribution limit for the year, which is quite possible if you have not been contributing to Rs PS in the past. So let's go with that $15000 example. Take that amount out of your savings and buy a safe GIC or other form of RRSP. I know you're only going to get a couple of percent of interest, but that's not really the point. [00:01:23][44.7]
[00:01:24] You see after the money is in the hours before 90 days. That's why I said three months. You can take it out and use it as your down payment on your first home. Now notice I said I was stressed the word first. That's because this only works for first time homebuyers. By the way, separating couples who sold their communal home may also qualify as first time buyers under this law. [00:01:45][21.5]
[00:01:46] So why would you bother doing this? Well, next year, when you fill out your income tax forms, you can now claim that RRSP contribution as a deduction. Yes. Even though you've taken it all out to do your down payment, you can still write it off. And dear Justin is going to send you a hefty refund. You'll have to pay those contributions back over 15 years. But that's a small price to pay for getting around 30 percent of it gifted to you right now. So, for example, let's say you put 15000 into an RSP this week, three months or more from now. Three months is just the minimum. So if even if you're buying it six months, eight months from now, you go ahead and take it out and use it as your down payment. So you'll have to return that fifteen thousand into your own fund over 15 years, which works out to a thousand dollars a year. You even get to wait for two years to start this. [00:02:36][49.4]
[00:02:36] But by doing this, your very next taxation year, you're going to get a nice refund probably in the neighborhood of three to four thousand dollars. So who doesn't need an extra three or four grand from the government in the late spring? When you get your income tax refund, you might be able to use it to get a new furnace for your house to a roof or do whatever other maintenance or upgrades that you wanted to do. Now, I'm a real estate agent, not a financial advisor. So if you have any questions about this. By all means, give me a shout. I'll put you in touch with the financial advisor that alerted me to this. And you can discuss it with them. But the bottom line is it's gonna put an extra three to four thousand dollars, depending on how much you're able to put into your RRSP, into your pocket. And I hope this helps. Thanks. Till next time. Bye bye. [00:03:24][47.5]
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About the PublisherBo Kauffmann is a residential real estate agent with over 18 yrs experience in helping buyers and sellers achieve their goals. Inducted into the REMAX Hall of Fame in 2010 and receiving the REMAX Lifetime Achievement Award in 2019, Bo has sold over 500 houses and condos in the Greater Winnipeg market. He is an accredited buyer representative (A.B.R.) and a Luxury Home Marketing Specialist. Bo provides exceptional service to First-Time Home-Buyers, Seniors looking to downsize and Home Sellers of all ages. He can be reached easily By E-Mail or call/text him Call/Text Here
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