The Home Buyer’s Plan and Lifelong Learning Plan are both programs designed by the Canadian government to help Canadians pay for particular large expenses in their life. Specifically, these programs work by allowing you to withdraw a certain amount of money from your RRSP without any tax penalties.
After making a withdrawal under either the Home Buyer’s Plan or the Lifelong Learning Plan, you will need to repay the amount withdrawn back to your RRSP.
When to start repaying your balance
You can think of the Home Buyer’s Plan and Lifelong Learning Plan as loans without interest. Repayments need to start in the second year following the year that the withdrawal is complete to make sure no penalties are incurred.
- From 2022 to 2023, no repayments are necessary to your RRSP.
- Between 2023 and 2024, you must make a minimum repayment to your RRSP in order to avoid penalties.
Home Buyer’s Plan
Generally, you must repay a Home Buyer’s Plan withdrawal in full to your RRSP within 15 years. For more information, reference the CRA’s guide to repaying funds withdrawn under the HBP.
Lifelong Learning Plan
Generally, you must repay a Lifelong Learning Plan withdrawal in full to your RRSP within 10 years. For more information, reference the CRA’s guide to repaying funds withdrawn under the LLP.
Find your repayment balance
The CRA will send you a Home Buyer’s Plan or Lifelong Learning Plan account statement after making a withdrawal under once of these plans. This account statement will include the total amount that you owe, along with the minimum payment due. You are responsible for meeting the minimum requirement, however you can make larger repayments to reduce the amount own quicker.
You can also view your balance through any of the following places:
- On your Notice of Assessment
- On your CRA MyAccount
- By calling the CRA at 1-800-959-8281
Reporting your repayment
You need to report repayments to the Home Buyer’s Plan or Lifelong Learning Plan on your Schedule 7 when submitting your T-1 General Income Tax Return.
Aside from receiving a T4RSP, you will not receive any other tax slips from Wealthsimple in relation to a Home Buyer's Plan or Lifelong Learning Plan withdrawal. It will be up to you to claim a repayment to your RRSP on your personal income taxes based on the amount you contributed (as per your contribution slip). The balance to be repaid can be found on your Notice of Assessment which is issued by the CRA every year after your tax return is processed.
Repayments and RRSP contribution room
Contributions made to repay your Home Buyer’s Plan or Lifelong Learning Plan balance do not affect your RRSP contribution room. These contributions are not tax deductible.
RRSP contribution receipts will be offset by the amount declared on Schedule 7 as an HBP repayment. You also need to ensure that you are designating RRSP contributions as repayments of the Home Buyer’s Plan or Lifelong Learning Plan loan rather than regular contributions to your RRSP. For instructions on how to report this on Wealthsimple Tax, click here.