If you are a senior and a first-time homebuyer, can you take money from an rrsp for a down payment without having to pay it back or be penalized?

Anyone who has qualified and withdrawn funds under the first-time homebuyers' plan has two choices: (1) repay the funds starting in the year following the withdrawal and over the subsequent 15 year period, or (2)add that years unpaid homebuyer amount to your taxable income. The requirement has no age exemptions. The homebuyer plan will still effectively shelter you from a one time balloon RSP withdrawal. Feel free to contact me at david.i.cole@rbc.com if you would like more details.

Great Question. Thanks David for the answer.

All first time homebuyers (regardless of age) can withdraw from their Registered plans with no tax penalty but this is not a freebie. You will have to pay it back eventually but the terms are very easy and you have ample time to reimburse your account.

If you are a 1st time buyer you can withdraw up to $25,000 from your RRSP without withholding taxes. As has been mentioned you need to pay back these funds over 15 years (1/15th every year) or you will be taxed on the un-paid portion for that year, as this money becomes an income for tax purposes. However being a senior if your avergae income tax rate is low to begin with, the tax imlications of this will be relatively minimal for you. You should consult with you tax professional to determine what these tax implicatios would be for you in actuall dollars and cents as you may be raising this concern for a very small tax bill annually (relatively speaking). The RRSP contribution represented a tax deferral for you when your working income was higher that your income in retirement. However it didn't elimintate the need to one day pay the tax on this income - the idea is that your average tax rate in retirement is lower than your working years.

Your age is not taken into consideration when repaying the RRSP. Same rules would apply to you as they would to anyone else who qualified for the Home Buyers Plan

your rrsp funds can beused for a first time home buyer up to 25000.THe funds have to be paid back after a 2yr grace period over 15yrs @1/15 per year,remember there is also a 750.00 grant for legal cost

Here is the link to this program.
http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

Good luck on your purchase
Darcy