RRSP Deadline: Maximize your Savings and Homeownership Potential
As we approach the RRSP deadline for our 2024 tax return, it’s the perfect time to consider how contributing to your Registered Retirement Savings Plan (RRSP) can benefit both your financial future and your homeownership goals.
When is the RRSP Deadline?
The deadline for RRSP contributions for the 2024 tax year is March 3, 2025. Any contributions made on or before this date can be deducted from your 2024 taxable income, potentially reducing the amount of tax you owe or increasing your tax refund.
Why Contribute to an RRSP?
Contributing to an RRSP allows your savings to grow tax-free until withdrawal. This means your investments compound over time without immediate tax implications. Additionally, an RRSP contribution can lower your taxable income, potentially placing you in a lower tax bracket.
Using Your RRSP for a Home Purchase
Did you know that your RRSP can help you buy a home? The Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $35,000 from their RRSP tax-free to use as a down payment. If you’re purchasing with a partner who also qualifies, you can combine withdrawals for a total of $70,000.
Repayment of the withdrawn amount begins two years after the withdrawal and must be completed within 15 years to avoid tax penalties. This can be a great way to accelerate homeownership while leveraging your RRSP savings.
How to Take Advantage of the RRSP Deadline
Maximize Your Contribution – Check your Notice of Assessment from the CRA to determine your available RRSP contribution room.
Consider a Loan or Contribution Top-Up – If you have unused contribution room, a short-term RRSP loan may help maximize your tax refund. Please be aware that any loan payment will need to be considered in your mortgage application.
Plan for Your Home Purchase – If you’re considering homeownership, use your RRSP to bolster your down payment through the HBP.
Talk to a Professional – MMG Mortgages can help you navigate your home buying options and how your RRSP can be a valuable tool in your journey.
Final Thoughts
The RRSP deadline is an important milestone for both retirement planning and homeownership. If you’re thinking about buying a home and want to explore how your RRSP can help, reach out to your favourite MMG Mortgages broker today. Our experts can guide you through your options and help you make the most of your financial resources.
Don’t miss out! Make your RRSP contribution before March 3, 2025, and take a step toward a stronger financial future.