An individual, who had an HBP balance of $5,000 at the beginning of the year 202X, contributed $5,000 to his RRSP on May 7, 202X to repay that HBP balance. On March 25, 202X+1, when filing his T1 return for 202X, he designated (on Sched. 7 to the return) that contribution as an HBP repayment for 202X. Will he be able to participate in the HBP again from January 1, 202X+1, or must he wait until March 25, 202X+1, the date he filed his 202X return with the designation?
CRA responded:
Assuming that all other HBP eligibility conditions are satisfied, if the individual wishes to participate in the HBP again in 20XX+1, he will only be able to do so from March 25, 20XX+1, the date on which the individual's tax return for 20XX with Schedule 7 is filed, indicating that he designates the amount contributed to his RRSP in 20XX as a repayment under the HBP. It is only from the time he indicates that the amount paid during the year 202X is a repayment under the HBP, pursuant to subsection 146.01(3), that his HBP balance will be nil at the beginning of calendar year 202X+1, as required by paragraph (i) of the definition of “regular eligible amount”.