Overview

The Home Buyers' 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making a withdrawal under either the Home Buyers' Plan or the Lifelong Learning Plan, you will need to repay the amount withdrawn back to your RRSP.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 Buyers' Plan (HBP) and Lifelong Learning Plan (LLP) as loans without interest. Repayments need to start in the second year following the year that the withdrawal is complete to make sure you don't incur any penalties. 

Example

Repayment timelines

• Home Buyers' Plan: Generally, you must repay a HBP 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 For more information, reference the CRA’s guide to repaying funds withdrawn under the HBP.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 an LLP 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 For more information, reference the CRA’s guide to repaying funds withdrawn under the LLP.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 an HBP or LLP account statement after making a withdrawal under one of these plans. This account statement will include the total amount that you owe, along with the minimum payment due. You're responsible for meeting the minimum requirement; however, you can make larger repayments to reduce the amount owed 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 HBP or LLP on your Schedule 7 when submitting your T-1 General Income Tax Return. 

Aside from receiving a T4RSP, you won't receive any other tax slips from Wealthsimple related to an HBP or LLP withdrawal. It'll 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). You can find the balance to be repaid on your Notice of Assessment, which the CRA issues every year after they process your tax return.

Repayments and RRSP contribution room

Contributions made to repay your HBP or LLP balance don't affect your RRSP contribution room. These contributions aren't 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're designating RRSP contributions as repayments of the HBP or LLP loan rather than regular contributions to your RRSP. Learn how to report your payment on Wealthsimple Tax.