HBP Repayment Question

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Feb 23rd, 2018 1:01 pm

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Feb 21st, 2018 8:17 am

jEnkinsX [OP]: Deal Fanatic; Feb 12, 2005; 8146 posts; 83 upvotes

Feb 21st, 2018 8:17 am

HBP Repayment Question

Timeline
Mar 2016 - Pull $15K from RRSP A and $6.5K from RRSP B. Put entire amount towards builder required deposit (plus some from my wife as required was $30K)
Apr 2016 - Present - I never stopped contributing to both my RRSPs. For calculations-sake I'm going from Apr 2016 to Apr 2017 so 12 months/26 biweekly paycheques (but should be a bit more since I'm still contributing to both at present)
RRSP A $100 per paycheque = $2600.
RRSP B $75 per paycheque = $1950

Total of $4550. I know it was last year but am I allowed to say I want that $4550 from 2016-2017 as part of my HBP repayment? Reason I'm asking is because next month will be my 2nd year and from what I understand that's when I'm required to start paying back the RRSP HBP. Just wondering if they can go back a year and count it towards the repayment.

Just wanted to try to pay as much of it back asap. Why? Correct me if im wrong but First Time HB resets at 5 years? What if I still owe money in my HBP on the 6th year and I want to get a new house and pull from my RRSP again knowing I still owe money?

Bonus question - my work matches RRSP contributions $1 for every $2. Can I count that match as part of my repayment?

Thanks in advance all!

[Heatware 72-0-0 ]

10 replies

Feb 21st, 2018 2:19 pm

Firebot: Deal Addict; Aug 12, 2004; 4494 posts; 2150 upvotes; Calgary

Feb 21st, 2018 2:19 pm

You are confused.

HBP does not reset while you own a home. It only resets if you have not been owning a home for 5 years. You cannot use the HBP again as long as you are a homeowner.

HBP repayment starts the tax year after your purchase. So if you bought and closed in 2016, you will start repayment for the tax year of 2017.

Your repayment is whatever you designate it to be for each year, the rest remains RRSP contribution. Note that repayment means you will be paying taxes on the income side for the repayment as it is no longer income counted towards your RRSP contribution.

Feb 21st, 2018 7:07 pm

Bella125: Sr. Member; Jul 11, 2017; 813 posts; 947 upvotes

Feb 21st, 2018 7:07 pm

I never repaid my HBP from 15 years ago. Someone at the bank forgot to fill in some form all those years ago and I've just rolled with it since!

Feb 22nd, 2018 6:15 pm

mstefa: Member; Apr 15, 2009; 281 posts; 290 upvotes; toronto

Feb 22nd, 2018 6:15 pm

Bella125 wrote: ↑ I never repaid my HBP from 15 years ago. Someone at the bank forgot to fill in some form all those years ago and I've just rolled with it since!

I wonder if this is legally your responsibility to chase down. I know if company doesn’t send you bills for few months and then send you 3,4,5 bills all at once, it’s still your bill to pay.

+1

Feb 22nd, 2018 7:25 pm

daivey: Penalty Box; Dec 27, 2013; 8003 posts; 4008 upvotes; Toronto

Feb 22nd, 2018 7:25 pm

Bella125 wrote: ↑ I never repaid my HBP from 15 years ago. Someone at the bank forgot to fill in some form all those years ago and I've just rolled with it since!

good luck with the CRA.
CRA doesn't care if you didn't fill in your form.

if it was keyed in as a HBP withdrawal, you owe that money back... and if not, then it was added to your income... and if u didn't get caught... start saving for that incoming tax bill.

Feb 22nd, 2018 8:34 pm

Biscayne05: Deal Addict; Apr 10, 2017; 2497 posts; 1699 upvotes

Feb 22nd, 2018 8:34 pm

Bella125 wrote: ↑ I never repaid my HBP from 15 years ago. Someone at the bank forgot to fill in some form all those years ago and I've just rolled with it since!

You're in for a surprise. I will never mess around with CRA.

+1

Feb 22nd, 2018 9:30 pm

Raela: Member; Dec 22, 2007; 344 posts; 48 upvotes; Thornhill

Feb 22nd, 2018 9:30 pm

Firebot wrote: ↑ You are confused.

HBP does not reset while you own a home. It only resets if you have not been owning a home for 5 years. You cannot use the HBP again as long as you are a homeowner.

HBP repayment starts the tax year after your purchase. So if you bought and closed in 2016, you will start repayment for the tax year of 2017.

Your repayment is whatever you designate it to be for each year, the rest remains RRSP contribution. Note that repayment means you will be paying taxes on the income side for the repayment as it is no longer income counted towards your RRSP contribution.

meaning if your contribution limit is $5000 for the year, but you can contribute $6000 as long as you declare $1000 is a repayment. So you won't be penalized as over contribution?
and when you mean there's no income on repayment, you mean out of the 6000 contributed, only 5000 would yield a tax refund, is that correct?

Feb 22nd, 2018 10:18 pm

mudd_stuffin: Deal Addict; Jun 11, 2005; 2764 posts; 400 upvotes

Feb 22nd, 2018 10:18 pm

Raela wrote: ↑ meaning if your contribution limit is $5000 for the year, but you can contribute $6000 as long as you declare $1000 is a repayment. So you won't be penalized as over contribution?
and when you mean there's no income on repayment, you mean out of the 6000 contributed, only 5000 would yield a tax refund, is that correct?

In this scenario, OP will never have an overcontribution because he can designate anything from $0 to $4,550 as repayment to the HBP. He can repay all of the HBP + his RRSP deduction limit + $2k overcontribution limit without incurring the penalty tax.

"No income on repayment" = you cannot deduct an amount contributed to your RRSP for which you designated as HBP repayment.

Feb 23rd, 2018 10:15 am

jEnkinsX [OP]: Deal Fanatic; Feb 12, 2005; 8146 posts; 83 upvotes

Feb 23rd, 2018 10:15 am

I guess I misunderstood the HBP reset.. I thought just after 5 years it resets.. I didn't know there are conditions.

When I "repay" it.. the money does NOT go to the government correct? It gets added back to my RRSP "pool" of money. Might be dumb questions.. Just never done this befre.

[Heatware 72-0-0 ]

Feb 23rd, 2018 12:59 pm

awestruck: Deal Addict; Mar 15, 2004; 3729 posts; 217 upvotes

Feb 23rd, 2018 12:59 pm

Firebot wrote: ↑ You are confused.

HBP does not reset while you own a home. It only resets if you have not been owning a home for 5 years. You cannot use the HBP again as long as you are a homeowner.

HBP repayment starts the tax year after your purchase. So if you bought and closed in 2016, you will start repayment for the tax year of 2017.

Your repayment is whatever you designate it to be for each year, the rest remains RRSP contribution. Note that repayment means you will be paying taxes on the income side for the repayment as it is no longer income counted towards your RRSP contribution.

The repayment will start in 2018

+1

Feb 23rd, 2018 1:01 pm

awestruck: Deal Addict; Mar 15, 2004; 3729 posts; 217 upvotes

Feb 23rd, 2018 1:01 pm

jEnkinsX wrote: ↑ I guess I misunderstood the HBP reset.. I thought just after 5 years it resets.. I didn't know there are conditions.

When I "repay" it.. the money does NOT go to the government correct? It gets added back to my RRSP "pool" of money. Might be dumb questions.. Just never done this befre.

Yeah, you repay what you withdrew and you have 15 years to do it

+1

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