Personal Finance

HBP Repayment Question - Increasing minimum value as income

  • Last Updated:
  • Aug 31st, 2018 11:47 pm
[OP]
Newbie
Aug 30, 2018
2 posts

HBP Repayment Question - Increasing minimum value as income

I've been trying to find clarification on repaying the HBP and was wondering if someone might have familiarity with this. I'm looking to repay my HBP earlier but not through RSP contributions but by taking it as income. As I understand it I could contribute a value larger than the minimum required for that year or even the total remaining via a RSP contribution, but I do find myself with a low income due to disability. Would I instead be able to increase the 1/15 repayment schedual as income? For example, my minimum repayment is ~$1500 per year. I'm not contributing to RSP at the moment so that value is added as "income from RSP"(I believe?) on line 129. Could I increase that value to say $8000, and add that value to my income for the year? And would I do this by simply increasing the value on line 129? I ask as I have quite a lot of medical expenses to which I could offset that income and potentially repay my HBP earlier maximizing the years where I've had a lot of medical bills. I've struggled to confirm if that is allowed, or if you can only increase the repayment via a RSP contributions?

This is what I'm reading from the CRA site. Bolded the part addressing minimum. It doesn't say one could put a greater value there, but not sure if that means one still can't?

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.


Appreciate any clarification one could provide me. I'll be inquiring with CRA for clarification, but they are currently not open and I'm not available when they are until Next week.

Thank you
4 replies
Deal Fanatic
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Jul 14, 2008
8102 posts
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Ontario
No, from my understanding of reading that same section, if you are contributing less than your HBP repayment for that year, the maximum is that repayment amount, not a figure higher.

“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.”

So, it would be 1/15 of the remaining balance. You cannot try to gain an advantage by over-contributing “non-payment”. You can however include up to the minimum repayment amount as income if you don’t contribute. The tax payable may be much less (or nil depending on your income). You do not however regain the RRSP room, it’s gone.

You can overcontribute to the HBP and designate more than the 1/15th amount if you are depositing funds into your RSP, but from what I can tell you cannot designate more than 1/15 when it’s less than 1/15 or zero.
[OP]
Newbie
Aug 30, 2018
2 posts
Thank you for the response. I appreciate the information and clarification.
Deal Addict
Nov 22, 2015
4191 posts
3288 upvotes
I think your question's been answered but I just wanted to address your bolded quote.

It's saying if you make no repayment at all, then line 129 must equal exactly the 'minimum repayment amount'

There must be another section that addresses partial repayment.
Deal Addict
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Mar 9, 2012
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Kitchener
superfresh89 wrote:
Aug 31st, 2018 9:32 pm
I think your question's been answered but I just wanted to address your bolded quote.

It's saying if you make no repayment at all, then line 129 must equal exactly the 'minimum repayment amount'

There must be another section that addresses partial repayment.
There is, as you're allowed to contribute x amount toward the HBP, and if it's less than the minimum, then you have to make up the difference.

Or, one can simply let the CRA fill it in for you. Couldn't be bothered with the HBP myself, so I let the CRA do the dirty work. It's all paid off now, so I have that going for me.
Well, I am not a crook.

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