My husband and I owned a home in Denver Colorado that was our primary residence which we sold in June 2007. We moved to Canada immediately after selling the house and have been renting ever since. Do we still qualify as a first-time home buyer for the HBP?

[...] contributing directly into your RRSP and then use the Home Buyer’s Plan (you can see a very nice description of the HBP over @ Million Dollar Journey), you should now consider using your TFSA [...]

You have to meet this condition at the time you withdraw an amount from your RRSPs under the HBP.”

We have a house,primary residence.It solely in my wife ’s name.Can i be considered a first time buyer,if I purchase another property(under my name only) using the HBP?
Thanx

I see that JC posted the same question that I would like to resolve. My girlfriend is not a first time home buyer, but I am. I assume that I can use my full amount, but what is the limit to the value of the house? The rules state that $450k is the max, but does it change if two people are involved?

$450k doesn’t buy you too much in Victoria!
thanks,
Mike

I think you’re confused on something.. with the HBP, you are using money that you’ve already put into an RRSP. So to answer a), you would need to wait until you contributed 25K to withdraw it. As far as contributing to an RRSP, the banks are usually more than willing to lend you money (since they get the interest) as long as your credit is good.

a) How long do I need to wait before I can get $25k towards my downpayment?

b) Secondly, at the moment I haven’t been able to put in any money into RRSP yet, will the banks still loan me the money and I can give it back on yearly basis?

I am fairly new to this concept so any help would be appreciated!

Thanks!

Jimmy

I don’t believe you get a ‘notice of repayment’, it’s just in your tax package every year it designates your repayment amount. So if you contributed $3000 to your RRSP.. there is a section in your Schedule 1A or whatever that would read ‘how much you’d like to designate to HBP repayment’.

I’m almost positive you can over-pay your RRSP and repay that way.. yes.

The thing is, is that you are not REQUIRED to pay back the RRSP.. ie: they’re not going to check that you have an RRSP with money in it.. but the thing is, you’ve paid tax on it for 7 years since the initial withdrawal, so it’s just like you withdrew the RRSP’s originally and didn’t even use the tax benefit of the HBP. Kinda like people whom cash in their RRSP’s early and buy something else.. the taxes they pay on it are huge.

Give you an example.. Last year my repayment amount was $486 (same every year I believe) and if I didn’t designate any money repaid this year (I don’t have any RRSP’s) my refund was going to be 2,501.37.. however once I put in the $486 designated as hbp repayment.. the refund went down to 2,327.38. A difference of 173.99.. which (x15) would be 2609.85.. OR the amount that I would have had to pay in taxes if I just took out the RRSP’s and didn’t use HBP.

So.. getting back to your question, there is a line which states “Amount of RRSP contributions designated as your 2008 HBP repayment” and you could certainly put your amount in there that you overpaid since you’re not getting the tax benefit anyways. (It doesn’t change anything, but it allows you to replenish your RRSP tax free)

Hope that helps.

Thanks
Jimmy

Sorry to have posted here.. it was sort of silly when I think about it.

http://www.lencurrie.com/2009/07/home-buyers-plan-finally-figured-this-out/

[...] (government of Canada website) also I would highly recommend the article by Million Dollar Journey here. (No Ratings Yet)  Loading … blog comments powered by Disqus var disqus_url [...]

Thanks for the great site mdj!

I have a question which I don’t think has been fielded yet.. I was able to withdraw using my RRSP’s into the HBP. And I am now in year 4 of paying it back I believe.

My question is, as I’m paying it back.. what is that money doing? I see it when I log into myfile or whatever the gov’t of Canada website is, however once I’m done paying it off in 15 years.. do I get a cheque? Does it go back to my RRSP account? I’m a little confused.. I’ve already saved the money.. and spent it on the house.. now I have to pay it back, so where is it going?

Thanks.

Len

I have enough money to close the deal but just wondering if the HBP money come later than my closing day, do I need to do anything to prove the HBP money is spent on my downpayment?

Thanks,

[...] house in the future.  One thought would be to start his RRSP so that he can take advantage of the RRSP home buyers plan in the future.  As Kevin is currently in the lowest tax bracket, I would suggest to claim the tax [...]

The HBP is not a free loan since you lose the interest.

We each took $20,000 from RRSP for a house in 2005 which we sold in 2006.
We are now retiring and still owe about 13 payments and have to consider lower income, CPP and OAS implications as well GIS and GST. It might have been better to leave the money in RRSPs. I think it’s necessary to repay before age 71 and roll into a RIF. Income tax is mindboggling with pension credit, age credit and transfers. Any suggestions?

I believe you can only do the HBP withdrawal in a single transaction.

perhaps look at loaning the 3K each(or whatever it takes to be able to max out the HBP) you were going to take out in the first withdrawal and then pay it back when you take it all out 90 days later. you get the tax refund which should more than cover the interest and fees you pay on a small 3K loan

you, of course, have to pay it back over the next 15 years. but it is essentially an interest free loan.