# Question regarding HBP repayment and Spousal RRSP



## AVoiceOfReason (Jan 12, 2016)

Hi Everyone

This is more a 2 part question: 
I currently have an outstanding balance of about 12K left on my HBP. If I was to open a spousal RRSP for my wife and contribute 12K to the plan

a) Could I use the contribution to a spousal RRSP count as repayment of my HBP amount?

b) If my wife waits the 3 years required for the money in the account to become hers for the purposes of attribution, could she use the money to buyback pension credit outstanding from her last maternity leave? (Her buyback amount is conveniently around the same amount)

Thank you to any insight you may provide.


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## Eclectic12 (Oct 20, 2010)

If the HBP withdrawal was made from your RRSP, the spousal RRSP route won't work as she owns the spousal RRSP. The HBP would have had to come from her RRSP to go this route.
http://www.moneysense.ca/save/taxes/recovering-from-bad-home-buyers-plan-advice/ 

For a spousal RRSP, she owns it so the minute you make a spousal RRSP contribution - it is hers, not yours. The only thing the attribution rule changes is who the withdrawal income is attributed to, not ownership.

I expect the pension buyback from spousal RRSP depends more on whether the buyback can be recorded as a transfer (i.e. no withdrawal) and possibly with a cavaet that the pension won't start for 3 years. The one time I was offered a pension buyback it wasn't worth it so I have not investigated (nor would I have qualified for a spousal RRSP option!).


Cheers


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## twa2w (Mar 5, 2016)

Electric 12 is correct. 

If the HBP withdrawal came from a plan in your name, the repayment must go into a plan in your name.
If the HBP withdrawal came from a plan in your spouse's name, whether or not it is a spousal plan, the repayment must be made by her to a plan in her name.

The article that was linked does have some misleading information if I read it correctly. It seemed to imply to me that if the HBP was taken from a spousal plan that attribution still applied to contributions within the 2 plus current year attribution time limit. I don't believe this to be the case. The 90 day limit does apply though and would cause attribution.
Of course if repayment isn't made by the spouse of scheduled HBP that are due within the 2+ current year rule, then attribution would apply to those.


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## Eclectic12 (Oct 20, 2010)

Iinterpreting the author as saying "valid HBP from a spousal RRSP = income to report that may be attributed back to the contributor", I don't believe is correct.

The issue the author is concerned about is "spousal RRSP contribution/withdrawal < 90 days disqualifies the withdrawal as HBP and makes it a regular spousal RRSP withdrawal that is taxable *and* potentially attributable back to the contributor".

The author writes about the "bigger issue" as well as puts cavaets by saying " ... if you contributed $25,000 to her spousal RRSP and *withdrew the money under the Home Buyers’ Plan right away*, which it sounds like you may have done ... " Where only one situation applies regardless of a valid or invalid HBP withdrawal then there is no need to write about an "issue" that has cavaets.

It would have been clearer to follow up the issue situation with "If what was done four years ago was a spousal RRSP withdrawal that was 91+ days after contribution, it would be a valid HBP withdrawal that is not subject to tax or attribution."


Cheers


*PS*

For all we know, the author may have had a longer but clearer write up that an editor or whomever cut down.


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## twa2w (Mar 5, 2016)

Ok, I see what you are interpreting it as. Makes more sense if you read it that way. I guess I scanned it too quickly.
Not sure why the author even brought it up as it appears CRA accepted the HBP.
Cheers


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## Eclectic12 (Oct 20, 2010)

It isn't the flow I would have used (though as I say, editors may have changed it).

HBP repayments should have already started so I agree that CRA likely accepted it, making the possibility of a disallowed HBP withdrawal result in a taxable withdrawal with possible attribution irrelevant to the disgruntled person asking the question.

Maybe it is reading too much in what reads to me as a disorganised answer ... but I can't help wondering if the author was trying to underline the advantages of consulting a better expert or educating oneself by trying to include all possibilities. In the process, the author seems to have missed that CRA likely would have been objecting about the disqualified HBP withdrawal long ago.


Cheers


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