RRSP and RESP funds for second home purchase

[Gemini]

Can RRSP and RESP funds be used to purchase a second home without any tax penalties/implications thru Olympia Trust accounts?

Please let me know if anyone looked into or purchased using this option.

 

[Thomas Beyer]

No. RRSPs or RESPs or TFSAs canNOT hold real estate directly.

You can however lend money as a mortgage, usually in second position, but could be in first. Not many trustees do it but OlympiaTrust does it and has extensive documentation on their website. Pick an interest rate that suits borrower and lender. Needs legal dox and takes about 1-2 months. So buy in cash or with an LOC then flush money out with RRSP mortgage later, after purchase.

More here https://ias.olympiatrust.com/mortgages

Annual fees and setup fees apply. As such I suggest a min $100,000 mortgage.

 

[Yvonne Qu]

Thanks for great question and insight from Thomas.
So I understand we can use our own RRSP/TFSAs to hold real estate directly. Not sure is it use to hold our own real estate or use it to hold somebody else real estate by lending our RRSP/TFSAs to the borrower?
How does it exactly work?
thanks in advance!
Yvonne Qu

 

[Thomas Beyer]

Thanks for great question and insight from Thomas.
So I understand we can use our own RRSP/TFSAs to hold real estate directly. Not sure is it use to hold our own real estate or use it to hold somebody else real estate by lending our RRSP/TFSAs to the borrower?
How does it exactly work?
thanks in advance!
Yvonne Qu

No you canNOT hold RE directly .. only indirectly via a REIT or shares of a PubCo or trust units, or by being a lender as described above.


Thomas Beyer, Asset Manager & Improver, Hard Asset Investor & DeFi Asset Hodler, Author, Father, Mentor, Hiker, Kayaker www.prestprop.com

 

[Yvonne Qu]

Thanks Thomas for your insights. I will check in more details to learn.

Sincerely,
Yvonne