Borrowing Family Member's RRSP Money
Q. Do you know of any way I could use my father-in laws RRSP money to invest in property? I listened to your RRSP Training Call CD (included with the RRSP financing course) and I thought I heard that one could do so with a corporation - i.e. My wife, Father-in law, and my self would all be members, however my father-in-law could not influence corporation decision-making.
Thanks in advance for your time
Peter from North Gower, Ontario
A. Using corporations to invest in RRSP mortgages is a fairly complex method. I recommend you keep your first RRSP mortgages simple by using someone else's RRSP directly (not using a corporation). Once you've got one or two under your belt, then you can try out the more exotic techniques.
CRA allows anyone who is 'arms length' from a borrower to loan money from their RRSP in the form of a mortgage. For a detailed description of CRA’s definition of ‘arms length’, please refer to interpretation bulletin # IT-419R2 at:
Even if your father-in-law had non-controlling shares in the corporation, I believe in CRA's eyes you are related to him and you still control the corporation. Therefore the corporation is not considered arms length from him.
I highly recommend you call CRA, propose your scenario, and see what they say. However, keep in mind that verbal responses from CRA don't carry much weight, even if you get the agent's name and ID number.
If you want to be 100% certain you can proceed in a given situation, you can ask for an official letter interpreting the act, but it will cost you a fee. If you have a letter from CRA telling you its okay, they can't come back to you later and change their story (or at least a tax court judge would likely frown on them for doing so).
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Paul Blacquiere and Joanne Beehler are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy.
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