Comments on: The Home Buyer's Plan (HBP): Borrow from yourself to help with home ownership

By: homebuyer

homebuyer — Thu, 20 Jan 2011 01:29:00 +0000

Oh, I should also mention that he has already paid back the full amount of his RRSP withdrawl.

By: homebuyer

homebuyer — Thu, 20 Jan 2011 01:28:14 +0000

I’m a bit confused about qualifying as a first time home buyer. My husband withdrew funds from his RRSP in July 2007 to purchase our first home. My name was also on the home. When would we both qualify to use the HBP again or at least myself qualify? July 2011 or July 2012? I’m a bit confused when you say “you must not have occupied a home as a principal residence at any time from January 1st of the 4th calendar year before the year of withdrawal and up to 31 days before the date of the withdrawal in the current year. “

By: susan

susan — Sun, 26 Dec 2010 22:23:14 +0000

Hi – I have a few questions on the HBP that I have not been able to get answers to:
1. Can I pay it all off before the 15 years?
2. Do I have to file taxes in order to pay it off or can I inform the government that it was paid through another means?
3. What happens if I never pay it off?
Thx

By: Adrian

Adrian — Mon, 08 Mar 2010 15:35:28 +0000

Hi Preet – I wonder if you can help me answer a question about re-payments following Home Buyer Plan RRSP withdrawal.

If I have previously maxed out all my RRSP contribution room and my RRSP contribution limit based on my previous years earnings is say $5000. Will I still be able to contribute $5000 (deductible from my income) plus the 1/15th (or perhaps more) to go against the repayment (non-deductible)?

I have searched the web for this answer but to no avail.

Thanks

By: Preet

Preet — Thu, 09 Jul 2009 01:24:20 +0000

@firsttimebuyer – You would be fine so long as the “contribution” was made 90 days prior to the withdrawal under the HBP program. The clock does not “reset”. Hope that helps, but as always I recommend you get final confirmation through your institution for your own particular situation… :)

By: firsttimebuyer

firsttimebuyer — Wed, 08 Jul 2009 20:55:17 +0000

Very useful article. Thanks so much! I do have a question about the 90-day ‘hold’ period, however. I am currently in a group RRSP through my work. If I change places of employment and transfer the money from my current RRSP to a new RRSP through my local bank, does the money I transferred have to remain in the new RRSP for 90 days prior to withdrawing it? or can I take advantage of the HBP right away?

Thank you so much.

By: Buy my home

Buy my home — Wed, 11 Mar 2009 17:02:37 +0000

>”Buy or build your home before October 1st of the year AFTER the year of withdrawal” – I guess it’s a bit late for me now, huh? or was it oct 2009? :)

By: Preet

Preet — Tue, 27 Nov 2007 09:52:05 +0000

Thank you for your comment Jean - you are very correct - the trade off of lost growth is offset by the growth in the house.

For your post suggestion - do you mean holding your own mortgage inside your RRSP? I have covered that recently here: Click Here

By: CanadianInvestor

CanadianInvestor — Tue, 27 Nov 2007 06:29:15 +0000

Useful post, well explained.
Though the interest-free loan is not earning the RRSP any interest, it is invested in the house, which gains in value over the years tax-free as a principal residence. Plus, it avoids the need to borrow money on the mortgage, and avoids the interest thereupon, which is not tax deductible. Unless my logic is wrong, the loan is in effect a way of converting non-deductible mortgage interest into tax-free interest, not in tangible terms but in opportunity cost terms.

Post suggestion: Maybe you should also write about using your RRSP to make a real mortgage loan to yourself.

By: Preet

Preet — Mon, 26 Nov 2007 23:10:17 +0000

Thanks so much for the comment - I was actually going to write about a few strategies concerning the HBP after writing this primer post. Your strategy was one of the strategies I am going to write about.

There is another strategy I am going to write which details why you may want to never pay back the HBP... you may find it of interest. Might not be for you - but I'm sure you'll find it interesting.

Stay tuned! And thanks for your contributions to the site! :)