# HBP - 90 day lockout period question



## HackNSlash (Apr 3, 2009)

Hi all,

My understanding is that you can only withdraw the 25K in your RRSP under the Home Buyer's Plan after that amount has been in there for 90 days. I have the amount in there invested rather foolishly in a blue-chippy mutual fund. Thanks to the gyrations of the market, my market value is bouncing around the 25K line.

So what does the 90 day waiting period apply to? Does my market value have to be 25K+ for 90 consecutive days? If that were true even if I had 25K and it was fluctuating +/- 0.01 every day I'd never be able to use it, ever!

Or do they count the contributions have to be 90 days old? But then if someone were to contribute 20K and then their investments turned that into 25K, they'd NEVER be able to withdraw the full 25K under the HBP.

I'm stumped. Any thoughts?


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## MoneyGal (Apr 24, 2009)

Here's the CRA form. 

You must deposit $25K to get $25K out. They aren't dealing with market value, but with the tax-deductible value of contributions. 

Same thing is true with repaying the withdrawn funds: you need to repay the full amount you withdrew, no matter the market value of those funds at the time of withdrawal.


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## Preet (Apr 3, 2009)

MoneyGal said:


> You must deposit $25K to get $25K out. They aren't dealing with market value, but with the tax-deductible value of contributions.


I believe this is incorrect. My understanding is that you could contribute $5.00 and through perfect market timing or whatever, you could have turned it into $25,000 after a few years. You could withdraw $25,000 under the HBP.


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## MoneyGal (Apr 24, 2009)

Frack, Preet, I think you are right. I got stuck somewhere in my reasoning, and even I don't know where now.


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## Preet (Apr 3, 2009)

Moneygal - happens to me ALL the time... and hey, are you a BSG fan?! Must be, no else says Frak. So say we all...


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## MoneyGal (Apr 24, 2009)

Hee. My husband was a HUGE part of Toronto Trek for many years - we're big into all of that in our household (and also raising two tiny girl nerds). 

Back to your regularly-scheduled discussion of HBP withdrawals.


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## King Tut (May 3, 2009)

What the CRA will be looking at is all monies that were deposited within the last 90 days. They do not care how much your RRSP has grown or went down.

So basically, they look at any deposits that has been made, and it is to stay in your account. Having said that, you can withdraw money that has not been there for 90 days, but the bank will withhold tax on it.

Hope that answers your question.


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