How to repay the funds withdrawn from RRSP(s) under the Home Buyers’ Plan (HBP)

When do you start making repayments?

Your repayment period starts the second year after the year you withdrew funds from your RRSP(s) for the HBP.

Note 

If you choose to start your repayments earlier, your repayment period will stay the same. Any repayments made before you are required to start your repayments will reduce the amount you have to repay for the first year. If your early repayment(s) are more than the required amount for the first year, the difference will reduce your HBP balance and your remaining repayment amounts over the entire repayment period.

Repaying the amount you withdrew

Generally, you have up to 15 years to repay to your RRSP(s), PRPP or SPP the amounts you withdrew from your RRSP(s) under the HBP. However, you can repay the full amount into your RRSP(s), PRPP or SPP at any time.

Each year, the Canada Revenue Agency (CRA) will send you a Home Buyers' Plan (HBP) statement of account, with your notice of assessment or notice of reassessment.

The statement will include:

  • the amount you have repaid so far (including any additional payments and amounts you included on your income tax and benefit return because they were not repaid);
  • your remaining HBP balance; and
  • the amount you have to contribute to your RRSP(s), PRPP or SPP and designate as a repayment for the following year.

You can view your Home Buyers’ Plan (HBP) statement of account online; go to My Account for more information. An authorized representative can also access this information online through Represent a Client. You can also view your HBP buy back amounts with the MyCRA mobile apps.

Notes 

Repayments do not affect your RRSP/PRPP deduction limit. You can still contribute to your RRSP(s) or PRPP and designate that amount as a repayment under the HBP, even if your RRSP deduction limit is zero.

You can view your RRSP/PRPP deduction limit online; go to My Account for more information or with MyCRA mobile apps. An authorized representative can access this information online through Represent a Client.

You cannot claim as a deduction on your income tax and benefit return an amount you designated as a repayment.

To make a repayment under the HBP, you have to make a contribution(s) to your RRSPs,  PRPP or SPP in the year the repayment is due or in the first 60 days of the year after. Once your contribution is made, you can designate all or part of the contribution as a repayment.

To designate your repayment, fill out Schedule 7, RRSP and PRPP Unused Contributions, Transfers, and HBP or LLP Activities and enter the amount of the repayment on line 246 and attach it to your income tax and benefit return. You have to fill out and send the CRA an income tax and benefit return until you have repaid all of your HBP withdrawals or included them in your income.

Note 

If you are filing electronically, keep all your supporting documents in case the CRA asks to see them later.

Repaying more than the required annual amount

Your remaining HBP balance for later years will be reduced if your designated HBP repayment is more than the amount you are required to repay for the year.

Notes 

You will still have to make repayments in the following years until the balance is zero.

The annual Home Buyers' Plan (HBP) Statement of Account that the CRA will send with your notice of assessment or notice of reassessment takes into account any additional payments you made. It will give you the minimum amount you have to repay for the next year. If you want to calculate the minimum amount you have to repay for the next year, divide your HBP balance by the number of years remaining in your repayment period. For an example, see Example – Calculation of annual repayment amount.

Repaying less than the required annual amount

You have to include the difference as RRSP income on line 129 of your income tax and benefit return if your designated HBP repayment is less than the amount you are required to repay for the year. You cannot include in your income more than the required repayment for the year minus the amount you repay and designate as an HBP repayment.

Repaying none of the annual amount required to be repaid for the year

If you do not make the annual repayment to your RRSP(s), PRPP or SPP, you have to include it as RRSP income on line 129 of your income tax and benefit return. The amount you include on line 129 is the minimum amount you have to repay as shown on your Home Buyers' Plan (HBP) Statement of Account. Your HBP balance will be reduced accordingly.

Note 

You will still have to make the annual repayment to your RRSP(s), PRPP or SPP for each year remaining in your HBP participation period, until you repay the total amount you withdrew from your RRSP(s) under the HBP.

Example – Calculation of annual repayment amount

In 2010, Suzanne withdrew $16,500 from her RRSP to participate in the HBP. Her minimum annual repayment starting in 2012 was $1,100 ($16,500 ÷ 15).

Suzanne made the repayment for 2012, 2013 and 2014.

In 2015, she contributes $8,000 to her RRSP and designates that amount as a repayment under the HBP for 2015.

She calculates the amount she has to repay for the year 2016, using the chart below.

Year 2012 2013 2014 2015 2016
HBP balance $16,500 $15,400 $14,300 $13,200 $5,200
Annual repayment amount $1,100
($16,500/15years)
$1,100
($15,400/14years)
$1,100
($14,300/13years)
$1,100
($13,200/12years)
$472.73
($5,200/11years)
Repayment made $1,100 $1,100 $1,100 $8,000 $472.73

Special repayment situations

Special repayment rules:

Contributions that cannot be designated as repayments

Not all contributions you make to your RRSP(s), PRPP or SPP in the repayment year or in the first 60 days of the year after can be designated as a repayment under the HBP. You cannot designate contributions that:

  • you make to your spouse's or common-law partner's RRSP(s) or SPP (or that he or she makes to your RRSP(s);
  • you transfer directly to your RRSP(s), PRPP or SPP from a registered pension plan, deferred profit-sharing plan, registered retirement income fund, a specified pension plan, or another RRSP or PRPP;
  • you deducted as a re-contribution of an excess qualifying withdrawal that you designated to have a provisional past service pension adjustment approved;
  • you designate as a repayment under the Lifelong Learning Plan (LLP) for the year;
  • you made in the first 60 days of the repayment year, that you already deducted on your income tax and benefit return for the previous year;
  • you already designated as a repayment for the previous year under the HBP or the LLP; or
  • you receive in the repayment year (such as retiring allowances) that you transfer to your RRSP(s), PRPP or SPP and deduct or will deduct on your income tax and benefit return for that year.

Note 

If your RRSP/PRPP deduction limit for the repayment year is zero, you can still contribute to your RRSP(s), PRPP or SPP and designate the amount(s) you contributed as a repayment under the HBP. We do not consider these amounts to be a RRSP contributions. Therefore, you cannot claim a deduction for these amounts on your income tax and benefit return.

Deceased participated in the Home Buyers' Plan (HBP)

General rule – If an HBP participant dies, the legal representative has to include the participant's HBP balance in the participant's income for the year of death.

The amount to be included in a deceased participant's income for the year of death is equal to the participant's HBP balance before death less any RRSP contributions (made before the participant died) designated as an HBP repayment for the year of death.

HBP election

If, at the time of death, the participant had a spouse or common-law partner who is a resident of Canada, that individual can jointly elect with the deceased participant's legal representative to make the repayments under the HBP. By doing so, the income inclusion rule will not apply for the deceased participant. The participant's HBP balance at the time of death less any RRSP contributions designated as an HBP repayment for the year of death is treated as if the surviving spouse or common-law partner withdrew it, and it has to be repaid to that individual's RRSPs.

Note 

Before the participant dies, the surviving spouse or common-law partner may have also become a participant in the HBP. There are no adverse tax consequences to the surviving spouse or common-law partner if, as a result of electing to treat the deceased participant's HBP balance as his or her own, the new HBP balance exceeds $25,000.

If at the time of death the participant's surviving spouse or common-law partner is also a participant and the election described above is made, the surviving spouse's or common-law partner's revised HBP balance has to be repaid over the remaining number of years in his or her repayment period.

However, if the surviving spouse or common-law partner was not a participant, the deceased participant's HBP balance has to be repaid over the same number of years remaining in the participation period of the deceased.

To make a joint election, the surviving spouse or common-law partner and the deceased participant's legal representative must attach a signed letter to the final income tax and benefit return of the deceased. The letter must state that an election is being made to have the surviving spouse or common-law partner continue making repayments under the HBP, and to not have the income inclusion rule apply for the deceased.

Generally, if the surviving spouse or common-law partner was not participating in the HBP but elects to continue making the repayments of the deceased individual, the surviving spouse or common-law partner would be considered a participant and cannot make any withdrawals under the HBP until the HBP balance is completely repaid and all the other applicable HBP conditions are met.

Note 

If the deceased had not made an HBP repayment for the year of death, and the election is made, the annual repayment for that year for the deceased would not be required.

The HBP participant reaches the age of 71

You cannot contribute to an RRSP, PRPP, or SPP after the end of the year in which you turn 71 years of age. As a result, you will not be able to repay any funds you withdrew from your RRSP after the end of the year you reach the age of 71.

In the year you turn 71, you can choose one of the following:

  • repay the remaining repayable balance to your RRSP(s);
  • make a partial repayment to your RRSP(s);
    • your remaining repayable balance at the beginning of the year you turn 72 will be divided by the number of years remaining in your repayment period. That calculated amount will be included as income on line 129 of your income tax and benefit return for each of the years after; or
  • make no repayment to your RRSP(s);
    • your repayable balance at the beginning of the year you turn 71 will be divided by the numbers of years remaining in your repayment period. That amount will be included as income on line 129 of your income tax and benefit return for each of the years after.

The HBP participant becomes a non-resident

If you become a non-resident after you receive your funds but before you buy or build a qualifying home, you must do one of the following:

  • cancel your participation in the HBP; or
  • repay a portion or all of the funds to your RRSP(s) by December 31 of the year after the year you withdrew the funds. Enter the amount you did not repay on line 129 of your income tax and benefit return for the year you withdraw the funds.

If you were a non-resident at the time you filed an income tax and benefit return for the year you received the funds, your cancellation payments are due by the earliest of the following two dates:

  • December 31 of the year after the year you received the funds; or
  • the day you filed an income tax and benefit return for the year you received the funds.

If you become a non-resident after you buy or build a qualifying home, you must choose one of the following options:

  • repay the remaining HBP balance to your RRSP by the earliest of the following dates:
    • before the time you file your income tax and benefit return for the year that you become a non-resident; or
    • 60 days after you become a non-resident;
  • include the remaining HBP balance as RRSP income on line 129 of your income tax and benefit return for the year that you become a non-resident.
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