An individual separates in September 2021 and wishes to use the individual’s HBP to purchase a new qualifying home in January 2022. All eligibility requirements for the HBP are otherwise met. However, having previously participated in the HBP, there is a balance of $5,000 remaining to be repaid at the time of the HBP withdrawal on January 20, 2022. The individual intends to make an RRSP contribution of $5,000 in February 2022, following the HBP withdrawal, and report this as a repayment of his HBP balance for the 2021 taxation year.
Would this satisfy the condition in s. 146.01(1) – regular eligible amount - para. (i) that the HBP balance be nil at the beginning of the 2022 withdrawal year? In responding negatively, CRA stated:
[O]nly after the individual has actually contributed amounts to the individual’s RRSP, no later than the first 60 days of the year, and indicated the total amount contributed as an HBP repayment for the previous taxation year on the prescribed form … will the individual be able to declare that the individual’s HBP balance is nil at the beginning of the calendar year.
… [W]hen the individual makes a withdrawal from the individual’s RRSP on January 20, 2022, his HBP balance at the beginning of the year 2022 for the purposes of the definition of "regular eligible amount" will [still] be $5,000 … because no HBP repayments have yet been made and reported on the prescribed form.