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The short answer
An RRSP withdrawal used for land in Nigeria is taxed as ordinary income. Your financial institution withholds 10% on amounts up to $5,000, 20% on amounts over $5,000 up to $15,000 and 30% above $15,000 (outside Quebec), and the full amount is added to your income for the year, so you may owe more when you file. No home-buyer relief applies: the FHSA rules, for example, require a home located in Canada.
Your RRSP may be the largest pool of money you have, and a plot or house in Nigeria may feel more urgent than retirement. Before you withdraw, it is worth seeing exactly what Canada takes.
The withholding at source
The CRA’s page on RRSP withdrawal tax rates (modified 29 January 2026) sets the withholding your bank or broker must deduct from a lump-sum withdrawal:
| Amount withdrawn | Canada except Quebec | Quebec (federal part) |
|---|---|---|
| Up to $5,000 | 10% | 5% |
| Over $5,000 up to $15,000 | 20% | 10% |
| Over $15,000 | 30% | 15% |
In Quebec, provincial tax is withheld as well, so check with your institution or Revenu Québec. If you are no longer a resident of Canada when you withdraw, the CRA says the rate is 25% unless a tax treaty reduces it.
Withholding is not the final bill
The CRA warns that the amount withheld may not cover the tax you owe. The whole withdrawal is reported on your return and added to your income for the year, so it is taxed at your marginal rate. Withholding is just a prepayment, credited against the final figure.
Worked example (illustrative rates)
You live in Ontario, earn $85,000, and withdraw $30,000 from your RRSP for land. Assume your combined marginal rate on the extra income is 33%.
| Step | Amount |
|---|---|
| Withdrawal | $30,000 |
| Withheld at source (30%, as the amount is over $15,000) | $9,000 |
| Cash you receive | $21,000 |
| Tax on $30,000 at an assumed 33% | $9,900 |
| Extra due when you file ($9,900 − $9,000) | $900 |
| Net cash for the land after all tax | $20,100 |
The rate here is an assumption for illustration; your own marginal rate depends on your province and income. A large withdrawal can also push part of your income into a higher bracket.
Splitting withdrawals
Taking several smaller withdrawals may reduce the amount withheld up front, because each falls into a lower band. It does not reduce the tax itself: all withdrawals in the year are added to income. Spreading withdrawals over two tax years can, though, keep each year’s income lower.
No home-buyer relief for Nigerian property
Canada’s home-buying incentives are built around homes in Canada. The CRA’s FHSA withdrawal rules say a qualifying home is a housing unit located in Canada. The RRSP Home Buyers’ Plan has its own conditions on the CRA’s website; do not assume it covers a purchase abroad. A withdrawal for Nigerian land is treated like any other ordinary withdrawal.
The longer-term cost
Money taken out stops growing tax-sheltered. If the land is an investment, compare its likely return in Canadian dollars, after naira movements and the risk of title problems, with what the same money might earn in the RRSP. When you later sell the land, any gain is a capital gain reported in Canada, and the land counts at cost for the T1135 test while you own it. See our guides on FHSA saving versus Nigerian land and Nigerian land and the T1135.
If you are planning to move back to Nigeria
Timing matters if you expect to leave Canada. While you are resident, a withdrawal is taxed at your marginal rate with withholding at the bands above. Once you are a non-resident, the CRA says 25% is withheld unless a tax treaty reduces the rate; the CRA points to Information Circular IC76-12R8 for treaty rates. Which route costs less depends on your income in the year you leave and on Nigerian tax on the receipt, so model both before choosing. Our piece on leaving Canada for Nigeria covers the wider departure rules.
Records to keep
Keep the withdrawal slip from your institution, the purchase agreement and title documents for the land, and proof of each transfer to Nigeria. The land’s Canadian-dollar cost will matter when you sell it, and the CRA’s capital gains guide says foreign property is converted at the rate when acquired.
Before you withdraw
- Have the plot’s title searched first; see AGIS title checks for Abuja.
- Work out your marginal rate for the year, including the withdrawal.
- Set aside money for any extra tax due when you file.
- Consider whether TFSA savings or other non-registered money would cost less to use.
Where Pryme fits
After the withdrawal, you can convert Canadian dollars to naira in your Pryme account with Swap, which shows the rate and the fee before you approve, and pay the seller or your lawyer from your naira balance.
Questions people ask
How much tax is withheld on an RRSP withdrawal?
Outside Quebec, 10% up to $5,000, 20% over $5,000 up to $15,000, and 30% over $15,000, according to the CRA.
Is the withholding the total tax I pay?
No. The withdrawal is added to your income and taxed at your marginal rate. You may owe more when you file.
Can I use the Home Buyers’ Plan for land in Nigeria?
Canada’s home-buyer incentives are built around homes in Canada. Check the HBP conditions on the CRA site; for the FHSA, the CRA says the home must be in Canada.
What if I withdraw after leaving Canada?
The CRA says non-residents have 25% withheld unless a tax treaty reduces the rate.
Sources
- CRA: Tax rates on RRSP withdrawals (modified 29 Jan 2026) · accessed Oct 2026
- CRA: Withdrawals and transfers out of your FHSAs (modified 10 Feb 2026) · accessed Oct 2026
- CRA guide T4037, Capital Gains (modified 11 Feb 2026) · accessed Oct 2026
- CRA: Questions and answers about Form T1135 (modified 19 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.