RRSP funds as a Rent-to-Own Initial Purchase Credit (“down payment”): The HBP (Home Buyer Program) rules require that the property title transfer to your name, which occurs only when you arrange your own mortgage at the end of a rent to own lease.
If you are considering using RRSP funds for your rent-to-own down payment, you MUST complete the purchase transaction before October 1 of the year after the year of the withdrawal to avoid a nasty tax bill. This means you’d have between 9 and 21 months to complete your purchase depending on when you withdraw your RRSP funds.
If you withdrew RRSP money on on Jan 1st, 2012 you’d have to September 30th, 2014 (21 months later) to complete purchase. If you withdrew on December 31st, 2011, you’d have until September 30th, 2012 (9 months later) to complete the purchase.
The Home Buyers’ Plan (HBP) is a Canadian Government program that allows you to withdraw up to $25,000 from your RRSP (if you have one) to help you buy or build a home.
Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years starting two years after withdrawal.