orn : iQ DOLLARS AND SENSE THE COSTS of using your “RRSP money to help buy a ‘home could run iato the “> tens and even hundreds of thousands of dollars. But the benefits could still “outweigh these costs. ~. “Ifa 35-year-old couple each took the maximum $20,000 out of _ their registered retirement savings - ‘plans under the homebuyers plan ‘~and repaid the money as required, cand if their RRSPs earned eight “per Cent, they would each have “about $90,700 less at age 65 than id Elio Luongo, of KPMG Peat arwick Thorne, chartered ac- . untants. oe ‘But if their first or a next -home improved their quality of: fe over the years, and especially “if the value of the property also “increased, those personal und fi- nancial benefits could outweigh. heir total RRSP. ‘Joss’ of more han $180,000." 0 Luongo and colleague Tony obmeier, as part of their annual eries of tax-planning tips for eaders of this column, also noted possible way. to save tax when the housing ‘‘loan’”’ from an . ‘RRSP js repaid under the _ homebuyers pian — more on that, Nateroes “If you are close to the age-71._- deadline 'f or, choosing how to withdraw RRSP funds, you can still take out up to $20,000 tax: i free to use to buy a home,” said Luongo. | ‘In that case, once you pass 71, you would simply add the mini- mum ‘repayment’ amount to your income each year and be taxed on that.”” NOTE: Use the information here to.prompt further research on how the relevant strategies might apply to your situation and what specific steps you should take. In many cases, you should also seek the advice of a tax expert — especially when large amounts of money could be involved. Under the homebuyers plan, extended to allow RRSP withdrawals through March 1, 1994, you must use the money to buy a home not owned previously by you or your spouse. (You don’t have to be first-time buyers or buy a new place.) You must complete the purchase by Sept. 30, 1994 (but if you took 44...it can sometimes pay not to make the repa ryments. 99 out the money before March 1, 1993,-then the deadline is Sept. 30 this year), and occupy the place as your pri:cipal residence within one year of acquisition. If you build a new residence, construction must start by those Sept. 30 deadlines and you must . move in within one year of com- pletion. You have to start paying back the money to your RRSP in 15 equal instalments starting Dec. 31, 1995. . ; If you pay less than the mini- mum, the difference will be added to your income that year and faxed, If you pay more, this can - reduce the minimum payments in the remaining years. .. These repayments don’t affect either your normal RRSP con- tribution limit or your ability