From Candice Schultz, who is Legal Documentation Specialist, Mortgages, Olympia Investment Account Services, inquiring about the credit bid process as it relates to Olympia. Here's what she said:
Once the bid is accepted, your lawyer would close the deal like a regular sale. The title is transferred to you and Olympia is retained on title as the charge party to for up to 12 months. However, the mortgage stays and becomes non-arm's length in the CRA's eyes. So within one year you have to come up with the full amount of the mortgage, whether from your deep pockets or a new mortgage, to repay Olympia and discharge the original mortgage.
Since TFSA withdrawal has no tax consequences, you can opt to de-register the TFSA portion and not have to repay back to Olympia. However, RRSP withdrawal would be subject to 30% withholding tax.
- from Wallace Lee, reaching out to Olympia
Also see additional Olympia documents attached.