I qualified and bought a home in 2015 using my HBP, but my partner and I split and will not be living together.

[smuggin]

The money will be returned back into the RRSP and I will cancel participation of the HBP. Knowing this, I should not claim the HBP credit (max $5,000) in my taxes this year?

[TurboTaxJeffrey · Accepted solution]

The Home Buyer's Amount is not dependant on having drawn money from your RRSPs via the Home Buyer's Plan.  Both the Home Buyer's Plan and the Home Buyer's Amount have the same requirements for eligibility...essentially not owning a house for 5 years.  However if you were to buy a house without borrowing from your RRSPs, you can still qualify for the Home Buyer's Amount on your tax return.

[smuggin]

So, better to enter in 0 now and save that tax credit for one day when I actually own a house?

[smuggin]

I'll be renting for another few years until I saw enough to use the HBP to buy a house. Otherwise, I'll have to pay the $750 I'm claiming back next year, anyway, right?

[TurboTaxJeffrey]

So you didn't actually buy a house in 2015 then?  If that is the case, then you can't claim the Home Buyer's Amount credit.

[TurboTaxJeffrey]

http://www.cra-arc.gc.ca/hbtc/

[smuggin]

At this moment, I have yet to send in the cancellation form because my partner has to sell his house in the summer/fall before he can pay back my $25,000 contribution to our pre-construction condo. But the money will go back to RRSP before Dec. 31. Should I send my cancellation form in now or wait until I have proof all funds are back in the RRSP account and accompany those documents in with my cancellation form to the CRA?

[smuggin]

But for now on my 2015 tax return, I have to file that I took out that money as part of the HBP, because that is what I did...

[TurboTaxJeffrey]

Yes, you will record that you withdrew monies for the HBP (remember, the Home Buyer's Plan related to RRSPs is not the same as the Home Buyer's Amount on your tax return).  You will have received a T4RSP with the amount shown in box 27.  

Did you actually purchase a house and take ownership of it in 2015?  If not, then you can't claim the Home Buyer's Amount.  If you did, then you are able to make the claim.

[smuggin]

No, the condo is still pre-construction. Ready for occupancy in the late summer, early fall.