How to Repay an RRSP Home Buyers' Plan Withdrawal and Report It to the CRA

When do Home Buyers' Plan repayments start?

You normally have up to 15 years to repay amounts withdrawn from your RRSP under the Home Buyers' Plan. The exact year your repayments begin depends on when you made your first HBP withdrawal.

For a first withdrawal made before January 1, 2022, the repayment period began in the second year after the year of the first withdrawal.

Temporary repayment relief applies to first HBP withdrawals made from January 1, 2022 through December 31, 2028. For these participants, the 15-year repayment period begins in the fifth year following the year of the first withdrawal.

For example, a first HBP withdrawal made in 2022 has its first required repayment year in 2027. A first withdrawal made in 2026 has its first required repayment year in 2031.

How much do you have to repay each year?

Your minimum required HBP repayment is based on your remaining HBP balance and the number of years left in your repayment period. The CRA states that you can calculate the next annual minimum by dividing your HBP balance by the number of years remaining in the repayment period.

Your annual HBP statement of account shows your remaining balance and the amount you must contribute and designate as a repayment for the following year.

Example of a minimum HBP repayment

If your HBP balance at the start of your 15-year repayment period is $30,000, the initial minimum annual repayment would generally be $2,000, calculated as $30,000 divided by 15. If you later make a repayment larger than the minimum, your remaining balance falls faster and future minimum repayments are recalculated over the years that remain.

How do you make an HBP repayment?

An HBP repayment has two separate parts: you first make an eligible contribution to a registered plan, and then you designate that contribution as an HBP repayment on your tax return.

1. Make a contribution to your own RRSP, PRPP or SPP.
2. Make the contribution during the year for which the repayment is due or during the first 60 days of the following year.
3. Complete Schedule 7 with your income tax and benefit return.
4. Designate all or part of the eligible contribution as your HBP repayment.
5. Enter the repayment amount on line 24600 of Schedule 7.

Simply contributing money to an RRSP does not by itself tell the CRA that the contribution is an HBP repayment. You must designate the eligible amount on Schedule 7.

Can you repay the Home Buyers' Plan to any RRSP?

You can make an HBP repayment through contributions to your own RRSP, PRPP or SPP, subject to the CRA's designation rules. You cannot designate a contribution to your spouse's or common-law partner's RRSP or SPP as your repayment.

You also cannot repay an HBP withdrawal into an FHSA.

Does an HBP repayment use RRSP contribution room?

The CRA states that HBP repayments do not affect your RRSP deduction limit. You can contribute and designate an amount as an HBP repayment even if your RRSP deduction limit is zero.

However, an amount designated as an HBP repayment cannot also be claimed as an RRSP deduction on your income tax and benefit return.

Can you repay more than the minimum?

Yes. You can repay more than the minimum required annual amount, or repay your full remaining HBP balance at any time.

If you repay more than the minimum, the extra amount reduces your remaining HBP balance. This can reduce the minimum required repayments in later years. You still remain in the repayment process until your HBP balance reaches zero.

Can you repay your HBP early before repayments are required?

Yes. The CRA allows you to make repayments before your mandatory repayment period begins. An early repayment reduces the amount that would otherwise be required in your first repayment year.

If your early repayments exceed the amount that would have been required for the first repayment year, the excess reduces your HBP balance and therefore reduces future minimum required repayments. Making an early repayment does not shorten the statutory repayment period by itself.

What happens if you repay less than the required amount?

If you designate less than your minimum required HBP repayment for a year, you must include the difference as RRSP income on line 12900 of your income tax and benefit return.

For example, if your required repayment is $2,000 but you designate only $1,200 as an HBP repayment, the remaining $800 must generally be included in your income for that year. That income inclusion also reduces your outstanding HBP balance.

What happens if you make no HBP repayment?

If you make no required repayment, the minimum repayment shown on your HBP statement of account must generally be included as RRSP income on line 12900 of your tax return. Your HBP balance is reduced by the amount included in income.

You will still have annual HBP obligations for the remaining years of the repayment period until the balance has been fully repaid or included in income.

Which contributions cannot be designated as HBP repayments?

Not every registered-plan contribution can be designated as an HBP repayment. CRA rules exclude several types of amounts, including:

• contributions to your spouse's or common-law partner's RRSP or SPP;
• certain direct transfers to an RRSP, PRPP or SPP from another registered plan, including an RPP, DPSP, RRIF, FHSA, SPP, another RRSP or another PRPP;
• amounts already designated as an HBP or Lifelong Learning Plan repayment for another year;
• amounts designated as a Lifelong Learning Plan repayment for the same year;
• certain contributions made in the first 60 days of the repayment year that were already deducted for the previous tax year;
• certain transferred retiring allowances and other amounts that are deducted or will be deducted on the tax return.

How do you report an HBP repayment to the CRA?

You must file an income tax and benefit return every year from the year of your first HBP withdrawal until all HBP withdrawals have either been repaid or included in your income. This requirement applies even if you do not owe tax or have declared bankruptcy.

Use Schedule 7, RRSP, PRPP, and SPP Contributions and Transfers, and HBP and LLP Activities. In the year of your first withdrawal, the CRA directs participants to complete Part E. In the following year and subsequent years, complete the applicable information in Part B.

When making a repayment, enter the amount designated as an HBP repayment on line 24600. Do not deduct that designated repayment on line 20800 of your income tax and benefit return.

How do you check your HBP balance and next payment?

The CRA provides an HBP statement of account with your notice of assessment or reassessment, or in some cases on Form T1028. The statement includes amounts already designated or included in income, your remaining HBP balance and the minimum amount required for the following year.

You can also check your HBP information through your CRA account. An authorized representative can access the information through Represent a Client.

Is there a fee to repay the Home Buyers' Plan?

The CRA does not charge a separate HBP repayment fee. The financial obligation is the amount you contribute and designate as a repayment. Your financial institution may have its own account or transaction terms, which are separate from CRA rules.

What is the deadline for an annual HBP repayment?

To designate an amount for a repayment year, the eligible RRSP, PRPP or SPP contribution must be made during that year or within the first 60 days of the following year. You then report the designated repayment on Schedule 7 with the corresponding income tax and benefit return.

Can you repay an HBP balance to an FHSA?

No. The CRA specifically states that Home Buyers' Plan withdrawals cannot be repaid to an FHSA. The repayment must be made through an eligible RRSP, PRPP or SPP contribution that is designated as an HBP repayment.

What happens if you become a non-resident of Canada?

Special rules apply if you become a non-resident after participating in the HBP. If you become a non-resident after buying or building the qualifying home, you generally must either repay your remaining HBP balance by the earlier of the date you file your tax return for the year you became a non-resident and 60 days after becoming a non-resident, or include the remaining balance as RRSP income for that year.

If you become a non-resident before buying or building the qualifying home, different cancellation and income-inclusion rules can apply.

What happens to an HBP balance at age 71?

You cannot contribute to an RRSP, PRPP or SPP after the end of the year in which you turn 71. The CRA therefore provides special rules for an HBP participant who still has a balance at that age. Depending on the repayment choice made in the year you turn 71, the remaining balance may be repaid, partially repaid, or included in income over the remaining years according to CRA rules.

What happens to an HBP balance when a participant dies?

Generally, the deceased participant's remaining HBP balance, less eligible repayments made before death for that year, is included in income for the year of death. If the participant had a spouse or common-law partner who is a resident of Canada, that person and the deceased participant's legal representative may in qualifying circumstances make a joint election for the surviving spouse or partner to continue the HBP repayments.

Key HBP repayment rules to remember

• The normal repayment period is up to 15 years.
• First withdrawals made from 2022 through 2028 receive temporary relief that delays the first required repayment until the fifth year after the withdrawal year.
• Repayments can be made to your own RRSP, PRPP or SPP.
• You cannot repay the HBP into an FHSA.
• An eligible contribution must be designated as an HBP repayment on Schedule 7.
• An HBP repayment is not deductible as an RRSP contribution.
• You can repay more than the annual minimum or repay the full balance early.
• If you repay less than the required minimum, the shortfall is generally included in your taxable income.