• Last Updated:
  • Feb 28th, 2018 9:47 pm
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[OP]
Jr. Member
Dec 13, 2014
127 posts
28 upvotes
Toronto, ON

RRSP & HBP

Howdy RFD,

I have a question on how the HBP repayment works.

I took out a loan under the HBP in july of 2017.
I have 15 years to repay it.
CRA does not show that I have an HBP loan out yet.

When does the first year I can repay start? (2017? 2018?) and how do I "repay" the loan? Are there forms I have to fill out?
I maxed my contribution room for the 2017-RRSP based off of my NOA. Does some of that $ go towards the HBP automatically? or only if I fill out a form?

In addition, if I maxed out my room, can I then contribute more to repay the HBP for the 2017 year?

Cheers,
Last edited by mlong813 on Jan 4th, 2019 9:39 am, edited 1 time in total.
9 replies
Member
Oct 26, 2007
314 posts
188 upvotes
Repayment will start in 2018 and you use your regular RRSP contributions. When you file your taxes you specify that you want a portion of your RRSP contributions to be allocated towards HBP repayment, no additional forms required. You cannot contribute more than your room towards HBP repayment.
[OP]
Jr. Member
Dec 13, 2014
127 posts
28 upvotes
Toronto, ON
negotiater wrote: Repayment will start in 2018 and you use your regular RRSP contributions. When you file your taxes you specify that you want a portion of your RRSP contributions to be allocated towards HBP repayment, no additional forms required. You cannot contribute more than your room towards HBP repayment.
Thank you.

That would be RRSP contribution (off NOA ) + HBP (/15yr) as my new "total room" right?
Member
Mar 3, 2016
387 posts
237 upvotes
negotiater wrote: Repayment will start in 2018 and you use your regular RRSP contributions. When you file your taxes you specify that you want a portion of your RRSP contributions to be allocated towards HBP repayment, no additional forms required. You cannot contribute more than your room towards HBP repayment.
Repayment does not have to start the year after the withdrawal but rather "the second year after the year you withdrew funds from your RRSP(s) for the HBP". In this case, the OP can wait till 2019 although they CAN start earlier if they so wish.
Last edited by Sam9876 on Feb 28th, 2018 10:34 am, edited 1 time in total.
Deal Addict
Apr 8, 2002
2267 posts
832 upvotes
Toronto
negotiater wrote: Repayment will start in 2018 and you use your regular RRSP contributions. When you file your taxes you specify that you want a portion of your RRSP contributions to be allocated towards HBP repayment, no additional forms required. You cannot contribute more than your room towards HBP repayment.
Correct me if I'm wrong, but I thought you're supposed to get a full tax year before you have to start paying it back? So if loan was taken out in July of 2017, repayment would start on Jan 2019.

*edit: poster above beat me to it*
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Member
Mar 3, 2016
387 posts
237 upvotes
mlong813 wrote: Thank you.

That would be RRSP contribution (off NOA ) + HBP (/15yr) as my new "total room" right?
The repayment shouldn't affect the contribution room you currently have and is accumulating as this repayment is a separate contribution on your tax returns.

Quoting the example from this website: "Contributions made as a repayment of your HBP withdrawal have no impact on your RRSP contribution limit. For example, if in any given year you contribute $10,000.00, which is your limit for that year, and you are required to repay $1,666.66 ($25,000 divided by 15 years) under the HBP, then you can use $8,333.33 of your contribution as a deduction. The $1,666.66 of unused contribution room is carried forward for future years."
Member
Dec 22, 2007
321 posts
24 upvotes
Thornhill
negotiater wrote: Repayment will start in 2018 and you use your regular RRSP contributions. When you file your taxes you specify that you want a portion of your RRSP contributions to be allocated towards HBP repayment, no additional forms required. You cannot contribute more than your room towards HBP repayment.
How sure are you of this? since from my knowledge, people are allowed to pay off HBP at once if wanted, that means someone will contribute 25000 in one go. So you're telling me that person needs a 25000 contribution room equivalent to income of 138,888?
Member
Oct 26, 2007
314 posts
188 upvotes
Raela wrote: How sure are you of this? since from my knowledge, people are allowed to pay off HBP at once if wanted, that means someone will contribute 25000 in one go. So you're telling me that person needs a 25000 contribution room equivalent to income of 138,888?
Sorry you are right, HBP will not be affected by contribution limit, OP take note. However there is no advantage in repaying early.
[OP]
Jr. Member
Dec 13, 2014
127 posts
28 upvotes
Toronto, ON
negotiater wrote: Sorry you are right, HBP will not be affected by contribution limit, OP take note. However there is no advantage in repaying early.
Besides more money in the market, but as a loan perspective, correct.

Thanks everyone.
Member
Dec 22, 2007
321 posts
24 upvotes
Thornhill
negotiater wrote: Sorry you are right, HBP will not be affected by contribution limit, OP take note. However there is no advantage in repaying early.
actually there is, I posted on the other thread, basically if you are investing US dividend stocks, time and a big factor in compounding your money, the sooner you put your money back to RRSP, the earlier you can start compounding

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