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posted Apr 4, 2021 10:37:49 AM

If I designate a portion of my tax refund to the Home Buyer’s Plan repayment. Where does it go? Into the RRSP it originally was withdrawn from?

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Level 6
Apr 4, 2021 8:10:08 PM

Thank you for choosing TurboTax. 

The HBP is a program to assist first-time homebuyers with financing the purchase of a property. Under the HBP, you can borrow a maximum of $35,000 from your RRSP in a single tax year.

 

Repayments for the HBP are made with contributions to your RRSP in the year of the repayment or 60 days in the following tax year. After you make your RRSP contribution, choose to count all or a portion towards repayment under the HBP. The only eligible contributions are the ones you made to your own RRSP account.

 

Any contributions u make as repayments to 

Home Buyer’s Plan do not particularly go to the RRSP form which the withdrawal was made unless u designate your RRSP contributions as repayments.

 

As per CRA: To designate your RRSP contributions as a repayment under the HBP, fill out lines 24500 Schedule 7 to report the RRSP you have contributed or unused from previous years. Then, fill line 24600 with the amount you wish to transfer to the HBP repayment. Make sure to designate the amount to the HBP in schedule 7, otherwise, your RRSP contributions do not count as a repayment; the HBP amount is added back as taxable income and you lose this RRSP room forever. You can contribute extra every year to reduce future payment amounts. 

 

For more information on "

Repaying Withdrawals Under the Home Buyer's Plan" 

please check the CRA link: 

https://www.canada.ca/en/revenue-agency/services/tax/individuals/repay-funds-withdrawn-rrsp-s-under-...

 

If you have any further clarifications, we would be glad to guide you through.