Can I keep my RDSP if I move abroad permanently?

This depends on one critical question: do you still qualify for the Disability Tax Credit (DTC) as a non-resident? The DTC requires the applicant to have a severe and prolonged impairment that markedly restricts their ability to perform a basic activity of daily living — this part isn't affected by where you live. However, the DTC certification process requires a medical practitioner to complete Form T2201 and CRA to approve it. CRA generally requires the individual to be a Canadian resident to claim the DTC for income tax purposes — non-residents are generally not entitled to disability tax credits under the Income Tax Act's non-resident rules. If you cease Canadian residency and lose DTC eligibility as a result, your RDSP must be collapsed by December 31 of the year following the year DTC certification is lost. This means all grants and bonds received in the prior 10 years must be repaid to the government, and the remaining balance is included in your income in the year of collapse. The collapse of a well-funded RDSP with significant government contributions can result in a very large income inclusion — potentially hundreds of thousands of dollars — in a single year. This is a severe financial consequence that must be planned for carefully before any move abroad.

What is the RDSP 10-year repayment rule and how does it work?

The 10-year holdback (sometimes called the 10-year repayment rule) is the most important and most misunderstood feature of the RDSP. The rule works like this: if the RDSP holder makes any withdrawal — including a voluntary Disability Assistance Payment (DAP) — the government will claw back every dollar of Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) that was deposited into the plan in the 10 calendar years before the withdrawal date. This is not proportional — it is a full recapture of all government contributions in the lookback period. Example: if your RDSP received $25,000 in CDSG and $8,000 in CDSB in the 10 years prior to a $5,000 DAP withdrawal, the government will withdraw $33,000 from the plan — even though you only took out $5,000. The plan's value drops dramatically as a result. The only exception to full repayment is if the plan has reached the 'assistance holdback amount' of zero — meaning all grants and bonds received more than 10 years ago have already been held for the required period, or the plan has been receiving mandatory LDAP withdrawals (which are not subject to the holdback). For most RDSP holders planning to access their plan for property purchases, the 10-year rule makes any voluntary withdrawal before the plan matures financially ruinous.

How are LDAP mandatory withdrawals calculated and when do they start?

The Lifetime Disability Assistance Payment (LDAP) is the mandatory withdrawal phase of the RDSP that begins no later than the calendar year the holder turns 60 — and the plan must begin making these withdrawals by that point. The minimum annual LDAP amount is calculated using a formula prescribed in the Income Tax Act regulations: the fair market value of the plan at the beginning of the year divided by the factor (83 minus the holder's current age). At age 60: $200,000 ÷ (83 − 60) = $200,000 ÷ 23 = approximately $8,696/year minimum. At age 65: $200,000 ÷ (83 − 65) = $200,000 ÷ 18 = approximately $11,111/year minimum. At age 70: $200,000 ÷ (83 − 70) = $200,000 ÷ 13 = approximately $15,385/year minimum. Note that as the holder ages, the factor decreases, so the minimum withdrawal amount increases both because the denominator shrinks and because the plan balance may have grown with investment returns. LDAP withdrawals are fully included in the holder's income in the year received — like RRIF minimum withdrawals. For a non-resident holder, 25% Canadian non-resident withholding tax applies to these payments unless reduced by a tax treaty.

What happens to the RDSP if I buy foreign property but maintain Canadian residency for part of the year?

If you maintain Canadian residency — keeping enough residential ties in Canada that you remain a Canadian tax resident — your RDSP is not directly affected by foreign property ownership. You can buy property in Mexico, Colombia, the Dominican Republic, or anywhere else, and as long as CRA continues to recognize you as a Canadian resident for tax purposes, your RDSP keeps its registered status, CDSG and CDSB continue to accrue if you're still in the contribution phase, and the 10-year holdback rules remain in effect without triggering. Many Canadians buy foreign property as a snowbird arrangement — spending 4–6 months abroad and maintaining their Canadian residence — and their RDSP is unaffected. The risk arises when the foreign property becomes your primary or only dwelling and you cease to be a Canadian resident for tax purposes. CRA assesses residency based on the totality of your residential ties: where you own property, where your spouse and dependents are, where your personal belongings are, where you maintain social and economic ties. Owning foreign property alone does not make you a non-resident — but combined with other factors, it can tip the scales.

Can an RDSP holder use funds from the plan to buy property abroad without triggering the repayment rule?

The only withdrawals that do not trigger the 10-year holdback are mandatory LDAP minimum withdrawals once the plan has entered the LDAP phase and the plan's 'assistance holdback amount' reaches zero (meaning more than 10 years have passed since any CDSG/CDSB was received). Voluntary Disability Assistance Payments (DAPs) — where the holder chooses to withdraw funds — always trigger the holdback if the plan holds any government contributions from the past 10 years. There is no 'home purchase' exception for RDSPs equivalent to the Home Buyers' Plan (HBP) for RRSPs. Using RDSP funds to buy property — foreign or domestic — is simply a DAP, subject to full holdback recapture. The practical implication: RDSP holders who want to fund a foreign property purchase should not plan to use RDSP funds until the assistance holdback amount has been zero for at least one year, which typically means the plan is at least 10 years past its last government contribution — often age 60–70+, which overlaps with the LDAP phase. For most buyers in their working years, the RDSP is off-limits as a funding source for property purchases.

What disability support programs and benefits would I lose by moving abroad?

Moving abroad permanently as a person with a disability triggers multiple benefit losses that compound the financial impact of RDSP implications. The Canada Pension Plan Disability (CPP-D) benefit continues to non-residents — it was earned through contributions, not residency-dependent. However, it becomes subject to non-resident withholding tax at 25% (treaty-reduced in some cases). The Disability Tax Credit (DTC) is generally unavailable to non-residents, which affects not only the RDSP but also various disability-related income tax credits your family may claim on their returns. Provincial disability benefits — like AISH in Alberta, ODSP in Ontario — are residency-dependent and cease upon permanent departure from the province. Federal GST/HST credit and related income-tested benefits also cease for non-residents. The healthcare implications are significant: OHIP and provincial health coverage requires physical presence in the province a minimum number of months per year (typically 153 days in Ontario). Medical equipment, specialist care, and accessibility support that exists in Canada may be substantially different or unavailable in the destination country. Moving abroad as a person with a disability requires a holistic assessment beyond just the RDSP — engage a lawyer familiar with disability law, a financial planner with disability expertise, and a healthcare consultant for the destination country.

Is a spousal RDSP affected if only the spouse moves abroad?

An RDSP holder can be a person other than the beneficiary — specifically, a spouse, common-law partner, or parent of an adult beneficiary who cannot enter into contracts due to their disability. If the plan holder (spouse/parent) emigrates while the beneficiary remains in Canada, the RDSP itself is not collapsed — the beneficiary's DTC status and Canadian residency are what matter for the plan's continuation. However, the plan holder's emigration creates a practical problem: Canadian financial institutions typically require the plan holder to be reachable and compliant with Canadian financial regulations to administer the plan. In practice, the plan holder's emigration usually requires a change of plan holder — transferring the plan holder role to a Canadian-resident individual, potentially a family member or a trustee. This is a legal and financial planning matter that should be addressed before departure. If the beneficiary themselves moves abroad, the DTC analysis above applies regardless of who the plan holder is.

Can I keep my RDSP if I move abroad permanently?

This depends on one critical question: do you still qualify for the Disability Tax Credit (DTC) as a non-resident? The DTC requires the applicant to have a severe and prolonged impairment that markedly restricts their ability to perform a basic activity of daily living — this part isn't affected by where you live. However, the DTC certification process requires a medical practitioner to complete Form T2201 and CRA to approve it. CRA generally requires the individual to be a Canadian resident to claim the DTC for income tax purposes — non-residents are generally not entitled to disability tax credits under the Income Tax Act's non-resident rules. If you cease Canadian residency and lose DTC eligibility as a result, your RDSP must be collapsed by December 31 of the year following the year DTC certification is lost. This means all grants and bonds received in the prior 10 years must be repaid to the government, and the remaining balance is included in your income in the year of collapse. The collapse of a well-funded RDSP with significant government contributions can result in a very large income inclusion — potentially hundreds of thousands of dollars — in a single year. This is a severe financial consequence that must be planned for carefully before any move abroad.

What is the RDSP 10-year repayment rule and how does it work?

The 10-year holdback (sometimes called the 10-year repayment rule) is the most important and most misunderstood feature of the RDSP. The rule works like this: if the RDSP holder makes any withdrawal — including a voluntary Disability Assistance Payment (DAP) — the government will claw back every dollar of Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) that was deposited into the plan in the 10 calendar years before the withdrawal date. This is not proportional — it is a full recapture of all government contributions in the lookback period. Example: if your RDSP received $25,000 in CDSG and $8,000 in CDSB in the 10 years prior to a $5,000 DAP withdrawal, the government will withdraw $33,000 from the plan — even though you only took out $5,000. The plan's value drops dramatically as a result. The only exception to full repayment is if the plan has reached the 'assistance holdback amount' of zero — meaning all grants and bonds received more than 10 years ago have already been held for the required period, or the plan has been receiving mandatory LDAP withdrawals (which are not subject to the holdback). For most RDSP holders planning to access their plan for property purchases, the 10-year rule makes any voluntary withdrawal before the plan matures financially ruinous.

How are LDAP mandatory withdrawals calculated and when do they start?

The Lifetime Disability Assistance Payment (LDAP) is the mandatory withdrawal phase of the RDSP that begins no later than the calendar year the holder turns 60 — and the plan must begin making these withdrawals by that point. The minimum annual LDAP amount is calculated using a formula prescribed in the Income Tax Act regulations: the fair market value of the plan at the beginning of the year divided by the factor (83 minus the holder's current age). At age 60: $200,000 ÷ (83 − 60) = $200,000 ÷ 23 = approximately $8,696/year minimum. At age 65: $200,000 ÷ (83 − 65) = $200,000 ÷ 18 = approximately $11,111/year minimum. At age 70: $200,000 ÷ (83 − 70) = $200,000 ÷ 13 = approximately $15,385/year minimum. Note that as the holder ages, the factor decreases, so the minimum withdrawal amount increases both because the denominator shrinks and because the plan balance may have grown with investment returns. LDAP withdrawals are fully included in the holder's income in the year received — like RRIF minimum withdrawals. For a non-resident holder, 25% Canadian non-resident withholding tax applies to these payments unless reduced by a tax treaty.

What happens to the RDSP if I buy foreign property but maintain Canadian residency for part of the year?

If you maintain Canadian residency — keeping enough residential ties in Canada that you remain a Canadian tax resident — your RDSP is not directly affected by foreign property ownership. You can buy property in Mexico, Colombia, the Dominican Republic, or anywhere else, and as long as CRA continues to recognize you as a Canadian resident for tax purposes, your RDSP keeps its registered status, CDSG and CDSB continue to accrue if you're still in the contribution phase, and the 10-year holdback rules remain in effect without triggering. Many Canadians buy foreign property as a snowbird arrangement — spending 4–6 months abroad and maintaining their Canadian residence — and their RDSP is unaffected. The risk arises when the foreign property becomes your primary or only dwelling and you cease to be a Canadian resident for tax purposes. CRA assesses residency based on the totality of your residential ties: where you own property, where your spouse and dependents are, where your personal belongings are, where you maintain social and economic ties. Owning foreign property alone does not make you a non-resident — but combined with other factors, it can tip the scales.

Can an RDSP holder use funds from the plan to buy property abroad without triggering the repayment rule?

The only withdrawals that do not trigger the 10-year holdback are mandatory LDAP minimum withdrawals once the plan has entered the LDAP phase and the plan's 'assistance holdback amount' reaches zero (meaning more than 10 years have passed since any CDSG/CDSB was received). Voluntary Disability Assistance Payments (DAPs) — where the holder chooses to withdraw funds — always trigger the holdback if the plan holds any government contributions from the past 10 years. There is no 'home purchase' exception for RDSPs equivalent to the Home Buyers' Plan (HBP) for RRSPs. Using RDSP funds to buy property — foreign or domestic — is simply a DAP, subject to full holdback recapture. The practical implication: RDSP holders who want to fund a foreign property purchase should not plan to use RDSP funds until the assistance holdback amount has been zero for at least one year, which typically means the plan is at least 10 years past its last government contribution — often age 60–70+, which overlaps with the LDAP phase. For most buyers in their working years, the RDSP is off-limits as a funding source for property purchases.

What disability support programs and benefits would I lose by moving abroad?

Moving abroad permanently as a person with a disability triggers multiple benefit losses that compound the financial impact of RDSP implications. The Canada Pension Plan Disability (CPP-D) benefit continues to non-residents — it was earned through contributions, not residency-dependent. However, it becomes subject to non-resident withholding tax at 25% (treaty-reduced in some cases). The Disability Tax Credit (DTC) is generally unavailable to non-residents, which affects not only the RDSP but also various disability-related income tax credits your family may claim on their returns. Provincial disability benefits — like AISH in Alberta, ODSP in Ontario — are residency-dependent and cease upon permanent departure from the province. Federal GST/HST credit and related income-tested benefits also cease for non-residents. The healthcare implications are significant: OHIP and provincial health coverage requires physical presence in the province a minimum number of months per year (typically 153 days in Ontario). Medical equipment, specialist care, and accessibility support that exists in Canada may be substantially different or unavailable in the destination country. Moving abroad as a person with a disability requires a holistic assessment beyond just the RDSP — engage a lawyer familiar with disability law, a financial planner with disability expertise, and a healthcare consultant for the destination country.

Is a spousal RDSP affected if only the spouse moves abroad?

An RDSP holder can be a person other than the beneficiary — specifically, a spouse, common-law partner, or parent of an adult beneficiary who cannot enter into contracts due to their disability. If the plan holder (spouse/parent) emigrates while the beneficiary remains in Canada, the RDSP itself is not collapsed — the beneficiary's DTC status and Canadian residency are what matter for the plan's continuation. However, the plan holder's emigration creates a practical problem: Canadian financial institutions typically require the plan holder to be reachable and compliant with Canadian financial regulations to administer the plan. In practice, the plan holder's emigration usually requires a change of plan holder — transferring the plan holder role to a Canadian-resident individual, potentially a family member or a trustee. This is a legal and financial planning matter that should be addressed before departure. If the beneficiary themselves moves abroad, the DTC analysis above applies regardless of who the plan holder is.

Reviewed on March 2026 by the Compass Abroad editorial team

RDSP and Retiring Abroad: What Canadians with Disabilities Need to Know Before Buying Property Outside Canada

An RDSP cannot be directly used to purchase foreign property — any voluntary withdrawal triggers repayment of all government grants and bonds received in the prior 10 years. Moving abroad as an RDSP holder risks losing DTC eligibility, which forces plan collapse and a potentially massive income inclusion. LDAP mandatory withdrawals begin at 60 and are subject to Canadian non-resident withholding if you've moved abroad.

This guide covers the specific financial implications of RDSP holders considering foreign property or relocation: the 10-year holdback mechanics, DTC residency requirements, the LDAP formula, non-resident withholding tax, and the disability benefit losses that compound the financial impact. It is not a guide to general RDSP planning — it focuses specifically on the foreign property and international relocation dimensions.

Key Takeaways

An RDSP (Registered Disability Savings Plan) can hold up to a lifetime maximum of $200,000 in contributions. The plan remains open as long as the holder maintains eligibility under the Disability Tax Credit (DTC) — losing DTC status is the primary reason plans must be closed.
The Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) are subject to a 10-year repayment rule: if any withdrawals are made within 10 years of receiving a grant or bond, ALL grants and bonds received in the previous 10 years must be repaid. This is the most financially dangerous aspect of RDSP planning.
Moving abroad does not automatically trigger RDSP collapse — but it creates practical complications. The DTC requires that the holder be a 'resident of Canada' for purposes of qualifying; ceasing Canadian residency may mean you no longer qualify for DTC certification, which means the RDSP must be closed within a defined period.
Once the RDSP holder turns 60, the plan enters the Lifetime Disability Assistance Payment (LDAP) phase — mandatory minimum withdrawals are required annually. The LDAP formula is: (account value) / (83 – current age). At age 63, for example: $200,000 / (83 – 63) = $10,000/year minimum.
LDAP withdrawals are included in the holder's income for tax purposes in the year received — just like RRIF minimum withdrawals. If the holder is now a non-resident of Canada, Canadian non-resident withholding tax applies.
The RDSP maximum contribution is $200,000 lifetime and there is no annual limit — but CDSG matching is capped at $3,500/year (up to $70,000 lifetime) and CDSB at $1,000/year (up to $20,000 lifetime), both income-tested. The government contributions dwarf what is available for any other registered plan on a per-dollar basis.
Canadians considering property abroad should assess whether the purchase is part of a longer-term relocation plan, because the RDSP treatment on departure from Canada differs fundamentally from TFSA or RRSP treatment — the 10-year repayment rule creates a unique financial trap.
A spouse or common-law partner of an RDSP holder can be a plan holder on behalf of an adult with a severe disability who cannot enter into contracts. If the spouse emigrates while the RDSP holder remains in Canada, the RDSP is not directly affected — the holder's residency is what matters.

Key RDSP Facts for Foreign Property & Relocation Planning

RDSP lifetime contribution limit: $200,000 — no annual limit, but CDSG and CDSB matching ends at 49(Income Tax Act s.146.4; Canada Disability Savings Act)
10-year grant/bond repayment rule: Any withdrawal triggers repayment of ALL CDSG/CDSB received in the prior 10 calendar years(Canada Disability Savings Act s.6; CRA RDSP guide RC4460)
LDAP minimum formula: Annual minimum = plan fair market value ÷ (83 minus holder's age) — starts year holder turns 60(Income Tax Act s.146.4(1); RC4460)
DTC residency requirement: DTC requires the individual to be a 'Canadian resident' — non-residents generally do not qualify(Income Tax Act s.118.3; T2201 application requirements)
CDSG maximum annual matching: $3,500/year (300% match on first $500, 200% on next $1,000 for income below ~$34K)(Canada Disability Savings Regulations)
CDSB maximum annual amount: $1,000/year for holders with family net income below ~$34K threshold(Canada Disability Savings Regulations)
Non-resident withholding on LDAP: 25% non-resident withholding tax on RDSP payments to non-residents; may be reduced by treaty(Income Tax Act s.212(1)(r); Canada-Mexico treaty reduces to 15-25%)
RDSP closure deadline after DTC loss: RDSP must be closed by December 31 of the year following the year DTC certification is lost(Income Tax Act s.146.4(4)(e))

Why the RDSP Is Unlike Every Other Registered Plan for International Planning

Most registered Canadian accounts have straightforward rules for international buyers: TFSA withdrawals are tax-free and can be used for any purpose including foreign property, RRSP withdrawals are taxable but available, RRIF minimum withdrawals continue regardless of residency. The RDSP is fundamentally different because it combines private contributions with substantial government subsidies — the CDSG and CDSB — and those subsidies come with long-term repayment obligations that make premature access financially devastating.

The Canada Disability Savings Grant provides up to $3,500 per year in matching contributions — a 300% match on the first $500 contributed and 200% on the next $1,000 for income-eligible households. The Canada Disability Savings Bond provides up to $1,000 per year with no required contribution for lower-income households. Over a beneficiary's lifetime, a well-used RDSP can receive $70,000 in grants and $20,000 in bonds — $90,000 in government money on top of private contributions. These are extraordinary benefits that require correspondingly stringent repayment rules.

The 10-year holdback is the mechanism that makes the government's investment worthwhile — it prevents beneficiaries from taking the grants and immediately accessing the capital. For international planning purposes, this means that RDSP holders considering foreign property or relocation must think 10 years out from any government contribution before accessing the plan voluntarily. Any buyer considering using RDSP funds to buy property abroad needs to understand this constraint in detail before making any financial commitments.

The DTC and Residency: The Critical Link for RDSP Holders Moving Abroad

The Disability Tax Credit (DTC) is the gate through which all RDSP eligibility flows. Without a valid DTC certificate, an RDSP cannot be opened and an existing RDSP must be collapsed. The DTC is a non-refundable tax credit available to Canadians with severe and prolonged impairments in physical or mental functions — and it is the foundational requirement that connects disability status to RDSP eligibility.

The legal issue for international movers: CRA's position is that non-residents of Canada are generally not entitled to claim the DTC, because the disability amount under s.118.3 of the Income Tax Act is available to "an individual" who meets the criteria, and the Income Tax Act's application to non-residents is limited. When you cease Canadian residency, your DTC certification technically remains on file, but your ability to benefit from it — and the financial institution's ability to maintain your RDSP — is called into question.

If you cease Canadian residency and your DTC is revoked or you are determined to no longer qualify, your financial institution is required to notify you and you have until December 31 of the following year to close the RDSP. On closure, all CDSG and CDSB received in the prior 10 years must be repaid to the government, and the remaining balance is included in your income for that year. The income inclusion on plan collapse can be severe: if the RDSP holds $300,000 and $60,000 must be repaid in government contributions, the remaining $240,000 would be included in income — at a 50%+ marginal rate for many beneficiaries who also have other income, the tax bill alone could be $100,000+.

The practical strategy for RDSP holders who want to buy foreign property is: maintain Canadian residency. This is not as limiting as it sounds — you can own a condo in Playa del Carmen, spend 5 months there every winter, and still be a Canadian resident for tax purposes if you maintain sufficient residential ties in Canada. The residency line matters. See our guide on departure tax and emigrating from Canada for the full residency determination analysis. Before doing anything, engage a Canadian tax lawyer with both RDSP and international tax expertise — the stakes are too high for general advice.

The LDAP Phase: What Mandatory Withdrawals Mean for International Buyers

Once an RDSP holder turns 60, the plan enters mandatory payout mode via the Lifetime Disability Assistance Payment (LDAP) schedule. The plan must begin making LDAP withdrawals by December 31 of the year the holder turns 60. These mandatory withdrawals cannot be skipped or deferred — they are similar in structure to RRIF minimum withdrawals.

The LDAP formula: minimum annual payment = (plan fair market value at January 1 of the year) ÷ (83 − holder's current age). Note that once the assistance holdback amount reaches zero — once all government contributions have been in the plan for 10+ years — the LDAP withdrawals are no longer subject to the holdback repayment rule. This means that holders who have held their plan long enough can receive LDAP withdrawals freely, without triggering grant recapture. Many holders approach their 60s with an assistance holdback amount of zero (because they haven't received new grants in over 10 years) — for them, the LDAP phase is relatively uncomplicated.

For RDSP holders who have relocated abroad and are receiving LDAP withdrawals as non-residents: the withdrawals are subject to Part XIII non-resident withholding tax at 25%, unless a tax treaty reduces this rate. Under the Canada-Mexico tax treaty, for example, periodic payments from a registered plan are subject to a 25% withholding rate — no treaty reduction applies to RDSP payments specifically (unlike pension payments, which receive treaty benefits). Under the Canada-Colombia treaty, a similar 25% applies. This means a $12,000 annual LDAP withdrawal results in $3,000 withheld by CRA, with only $9,000 received — and the $12,000 is included in your income for your destination country's tax purposes as well, creating potential double taxation unless the destination country provides a foreign tax credit for the Canadian withholding. Get advice from a tax professional in both countries before the LDAP phase begins if you are a non-resident.

RDSP Holder Considering Property Abroad? Get Specialized Advice First.

The financial stakes of an RDSP mistake are enormous — the 10-year holdback and DTC residency rules interact in ways that can result in six-figure income inclusions. We connect buyers with specialists who understand both the destination market and the Canadian disability planning picture.

Frequently Asked Questions: RDSP and Retiring Abroad

Planning a Retirement Abroad with Complex Canadian Benefits?

Whether you're in the LDAP phase or still accumulating, buying property abroad while managing Canadian disability benefits requires careful coordination. Compass Abroad matches you with professionals who have done this before.