# New Home + Rental Income = What to do?



## itsray (Oct 14, 2012)

Hello:

I'm in the midst of buying my first home (using RRSPs through HBP for first time home buyers) but I do not plan to live in that place. Due to work commitments I am located far from where I am buying (I don't need a primary residence for a while). Thus, I will be renting this place out. Should I declare this as my primary residence? Can I still use the RRSPs if I declare this as income producing property? 

Please advise.

Ray


----------



## stardancer (Apr 26, 2009)

No you cannot use the HBP for an income-producing property; it is meant for principal residences only. You must move in/occupy within one year after withdrawing. http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/cndtns/menu-eng.html

If you declare this place as your primary residence while collecting rental income, and living miles away, I think you will eventually be audited big time.


----------



## sprocket1200 (Aug 21, 2009)

buy high, sell low!!


----------



## Aero (Oct 17, 2012)

itsray said:


> Hello:
> 
> I'm in the midst of buying my first home (using RRSPs through HBP for first time home buyers) but I do not plan to live in that place. Due to work commitments I am located far from where I am buying (I don't need a primary residence for a while). Thus, I will be renting this place out. Should I declare this as my primary residence? Can I still use the RRSPs if I declare this as income producing property?
> 
> ...



This should help you:

http://www.cra-arc.gc.ca/E/pub/tp/it120r6/it120r6-e.html#P76_9122

Also, for your mortgage-- as my banker once told me, if you plan to live in it for even a day, you can get the rate as if it were your primary residence. As soon as you tell them it's an investment property, rules and rates change. Keep that in mind.


----------



## DavidJD (Sep 27, 2009)

I bought my first property - a triplex - using the HBP. Instead of putting 5% down, I had to put 10% down since it was a triplex. If I had bought a duplex it would have been 7.5% down. I did live in one unit though...

If you do that for 90 days, then your "circumstances change and you have to move", I think you can rent without anyserious problems.


----------

