Repaying withdrawals under the Home Buyers’ Plan

Pay attention to the RRSP account used to repay the loan

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From the December 2015 issue of the magazine.

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Q: I borrowed $10,200 from my RRSP many years ago under the Home Buyers’ Plan (HBP), which I have since repaid in full through contributions and income inclusion. However, my RRSP account at my financial institution is at $0.00. What happened to the money I repaid then?

—Sarah Felix, via email

A: If you repaid the money into an RRSP account, in all likelihood it is there. However that does not mean the repaid money went back into the same RRSP account you borrowed from. That’s because the Canada Revenue Agency doesn’t care which RRSP account you use to repay the HBP loan—and the CRA doesn’t move the money from one RRSP account to another on your behalf. All the CRA cares about is that you either repay the money or declare that you didn’t and pay tax as if it was an RRSP withdrawal. To get a clear picture, check your HBP Statement of Account, which is sent with your annual Notice of Assessment. The statement is also accessible online.

Bruce Sellery is a frequent guest on financial television shows and author of Moolala. Do you have your own personal finance question? Write to us at ask@moneysense.ca

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