3

I have withdrawn $15,000 using Canada Home Buyer's Plan from my spouse's RRSP account in the year 2016. The withdrawal was only from spouse's RRSP account, not my account.

Now we are planning to do a basement renovation.

Can we withdraw another $25,000 from my own RRSP account now for the purpose of renovation, for the same house we bought in 2016?

3

You can withdraw the funds, you'll just have to pay tax on them as you would any other RRSP withdrawal, and you would be unable to recontribute the funds at a later date.

The only exception is for payments made for a first time home buyer. Without getting into the idea of whether reno costs count for that in general, if you have owned the home for > 30 days, it will be too late for you to make such a withdrawal. Details on what is allowed for the First Time Home Buyer Plan can be found here:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html#RRSP-withdrawalconditions

2

Depending on the ratio of the value of the home and the equity you have uncovered, you could qualify for a Home Equity Line of Credit (HELOC). Typically, Canadian banks will give HELOC loans if your loan to value ratio is below .8; in other words if you have at least 20% equity.

  • 1
    I'd personally discourage a HELOC loan but in some rare cases, it is useful. – Lan Mar 16 '18 at 16:17
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    I think if you elucidated on the downsides of a HELOC, even just in reference to the generic perils of using debt for consumption spending, you could further increase the value of this answer. It may be a nice alternative for the OP's needs. – Grade 'Eh' Bacon Mar 16 '18 at 16:34

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