Section 146.01

Subsection 146.01(1) - Definitions

Eligible Amount

Administrative Policy

14 June 2012 External T.I. 2012-0443711E5 F - RAP - Annulation de la vente de l'immeuble

subsequent court-ordered voiding of home purchase funded with HBP does not affect satisfaction of the HBP conditions

In confirming that a judgment declaring a sale of a home to be void would not affect the operation of the HBP rules where the home in question was acquired under an HBP, CRA stated:

Eligibility for withdrawing funds from an RRSP under the HBP … is not affected by the occurrence of subsequent events. As a result, once all the conditions to participate in the HBP are met and a withdrawal has been made from an RRSP, it is not possible to cancel participation in the HBP. … In addition, subject to special repayment situations, the repayment period for withdrawals under this HBP remains unchanged by the voiding of the sale.

Locations of other summaries Wordcount
Tax Topics - General Concepts - Effective Date subsequent court-ordered voiding of home purchase did not retroactively void satisfaction of the HBP conditions at home purchase time 99

29 September 1994 Memorandum (C.T.O. "First-time Home buyer under Home Buyers' Plan")

The exclusion in s. 146.01(1)(d.1)(ii) limits the exclusion to individuals to have spouses at the time of the withdrawal. Accordingly, if at the time of the withdrawal the taxpayer was divorced from his spouse, the previous ownership by the spouse of a principal residence will not result in disqualification.

It is also considered that the joint ownership of a home by a taxpayer with her spouse after January 1, 1990 will not result in disqualification if subsequent to that time she was separated from her spouse and did not inhabit the house, as referred to in s. 146.01(2)(a.1).

HBP Balance

Administrative Policy

7 October 2022 APFF Financial Strategies and Instruments Roundtable, Q.7

HBP balance not reduced until s. 146.01(3) repayment is made and prescribed form filed

As part of the rules for allowing an individual to participate in a home buyers’ plan (HBP) in more than one calendar year, individuals can have a fresh participation period in which they can make a further HBP withdrawal if they have contributed amounts to their RRSP that are designated to be non-deductible HBP repayments, so as to reduce their “HBP balance” to nil. In particular, in order for a withdrawal to qualify as a “regular eligible amount,” para. (i) of the definition thereof requires the individual’s HBP balance at the beginning of the withdrawal year be nil.

An individual, who separated in September 2021, withdrew from his HBP on January 20, 2022 in order to purchase a new qualifying home, and made an RRSP contribution of $5,000 in February 2022 to repay his HBP balance for the 2021 taxation year.

CRA indicated that although, once this contribution was made and the prescribed form filed, it would have reduced his HBP balance as at January 1 of that year, at the time of the withdrawal these conditions (re the contribution and filing) had not yet been satisfied, so that the requirement for a nil HBP balance was not satisfied. Hence, the withdrawal did not qualify.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (i) an HBP balance is not reduced at the beginning of the year of a contribution repayment by the repayment amount until the repayment is made 239

Qualifying Home

Administrative Policy

17 September 1998 External T.I. 98222950 F - Régime d'accession à la propriété - habitation admissible

qualifying home can be part of a larger commercial building
Also referred to as 9822295

In finding that the definition of "qualifying home" include a residential unit in a semi-commercial building, CRA stated:

[S]ingle-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes or apartment buildings, are all considered qualifying homes. … [A] housing unit in a semi-commercial building would also be a "qualifying home" … .

In addition, the qualifying home must be occupied as a principal place of residence within one year of acquisition. The term "principal place of residence" is not defined … .

3 April 1992 T.I. (Tax Window, No. 18, p. 23, ¶1865)

The purchase by an individual of the interest of a former common-law spouse in a jointly-owned home would qualify as the acquisition of a "qualifying home".

Regular Eligible Amount

Paragraph (a)

Administrative Policy

25 February 2011 External T.I. 2010-0387991E5 F - RAP, intention, lieu principal de résidence

test is one of intention at withdrawal time and not whether closing actually occurred

Did a taxpayer meet the eligibility criteria for an HBP where there was an intention to start using a qualifying home as the individual's principal place of residence no later than one year after the acquisition, but after acquiring the housing, found that it was not possible to live in it? In responding, CRA confirmed that statement in Guide RC4135:

In some cases, you may not occupy the qualifying home by the end of the 12-month period after you bought or built it. If this happens, you are still considered to have satisfied this condition if, at the time you withdrew funds under the HBP, you did in fact, intend to occupy the home as your principal place of residence no later than one year after buying or building it.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(3) timing of HBP balance reduction 141

Paragraph (b)

Administrative Policy

11 February 2015 External T.I. 2014-0550871E5 F - RAP situation particulière

interest in home passing on an intestacy and through gift could qualify

An individual and other persons inherited a house and, when the others accepted the inheritance, they made a gift to the individual of their respective shares in the house. You stated that the deceased had not left a will. Can the individual benefit from the home buyer plan (“HBP”) rules based on having entered into a written agreement to acquire or construct a housing unit? CRA responded:

[W]here one or more written agreements provide for the acquisition of a house by way of legacy and gift, the CRA is generally of the view that it is a valid acquisition for the purposes of the definition of "regular eligible amount ". Consequently, provided that the other conditions…are satisfied, acquiring a qualifying home in the circumstances described above would not preclude… from participating in the HBP.

28 September 2010 External T.I. 2010-0370831E5 F - RAP, acquisition par donation

HBP available where the home is acquired by way of gift

Is the home buyers' plan (HBP) available where the home is acquired by way of gift? CRA responded:

[Y]ou must have entered into a written agreement to acquire or construct a home before receiving an amount as a benefit under a registered retirement savings plan. In our view, where a written agreement is for the acquisition of a home by way of gift, there is a valid acquisition for the purposes of that definition. Consequently, provided the other conditions for participating in the HBP are satisfied, acquiring a qualifying home by way of gift will not prevent you from participating in the HBP.

Paragraph (e)

Administrative Policy

14 June 2013 External T.I. 2013-0477881E5 F - Régime d'accession à la propriété

use of U.S. home as principal place of residence would also disqualify

Can an individual who had already owned a home in the U.S withdraw an amount from an RRSP under the home buyers’ program? After stating that “where an individual owning a home has lived in it as the principal place of residence, we consider that the individual owned the home as an owner-occupant” and referring to the discussion in Income Technical News No. 31 of the meaning of “principal place of residence,” CRA stated:

The fact that the home was located in the United States does not alter this opinion.

14 April 2010 External T.I. 2010-0356901E5 F - RAP- Rétroactivité

ownership of a home whose purchase was voided did not count

Before indicating that on the submitted facts, the correspondent did not qualify under para. (e). CRA stated:

We are of the view that the nullification of the sale of an immovable under Article 1422 of the Civil Code of Quebec means that the purchaser of the immovable is not considered to have been the owner for the purposes of the HBP.

Paragraph (f)

Administrative Policy

7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 5, 2021-0903871C6 F - HBP - Breakdown of marriage or common-law partners

individual could make an HBP withdrawal after she started living separate and apart (but still in same house) from her common-law partner

CRA accepted that “common-law partners” (Mr. X and Ms. Y), who had been living in a home owned by Mr. X, would cease to have the quoted status 90 days after they had started living separate and apart (albeit, still residing in Mr. X’s house), so that Ms. Y could thereafter make a home buyer plan (HBP) withdrawal from her RRSP without running afoul of the rule (in para. (f) of the definition in s. 146.01(1) of “regular eligible amount”) that at the time of the withdrawal, a common-law partner (or spouse) of Ms. Y did not have an owner-occupied home that had been occupied by her during their partnership (or marriage).

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner former common-law partners can live separate and apart in the same house, and cessation of their status is effective the first day 193
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(2.1) - Paragraph 146.01(2.1)(a) when two spouses separate in the same co-owned house, one can make an HBP withdrawal to purchase the co-ownership interest of her spouse 249

11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 2, 2019-0811881C6 F - HBP/HBTC - Death of a spouse

widow who had resided in the home of her deceased husband could access the HBP program to purchase a condo or acquire his home from estate

Monsieur had predeceased Madame, aged 58, three months before her purchase of a condo in July 2019, using funds withdrawn from her RRSP. Monsieur had been the sole owner of their home until his death, with the home then held by the estate before its sale. Is Madam eligible for home buyer plan (HBP) treatment?

CRA found that, given that Monsieur was no longer considered to be her spouse at the time of her withdrawal from her RRSP, she was eligible for HBP treatment provided the other conditions were satisfied, stating:

[S]ince Madame does not have a spouse or common-law partner at the time of the withdrawal of an amount from her RRSP, being in July 2019, the condition set out in paragraph (f) of the definition "regular eligible amount" in subsection 146.01(1) would not be applicable. Furthermore, since she was not the owner-occupant of a home during the period beginning on January 1, 2015 and ending 31 days before the date of the withdrawal in July 2019, we are of the view that the condition in paragraph (e) of the definition "regular eligible amount" in subsection 146.01(1) is satisfied.

Madame also would have been entitled under the HBP rules to use her RRSP funds on an acquisition of the home of her deceased husband from the estate, provided that there was an agreement in writing for its acquisition.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 118.05 - Subsection 118.05(1) - Qualifying Home - Paragraph (a) widow who had resided in the home of her deceased husband could access the first-time home buyer’s credit 169

23 February 2004 External T.I. 2004-0057051E5 F - RAP - Personne séparée

separated spouse’s ownership is relevant

Regarding whether the correspondent’s wife was eligible to participate in the home buyers' plan given that you have been living separate and apart since December 2003, CRA stated:

[P]ersons united by marriage remain spouses until the marriage is legally dissolved.

Thus, where an individual has a spouse at the time of withdrawal who owned a home during the period beginning on January 1, 2000 and ending 31 days before the date of withdrawal in 2004, and the individual occupied the home during their marriage, it is our view that the individual will not be able to participate in the HBP.

Words and Phrases
spouse

Paragraph (i)

Administrative Policy

7 October 2022 APFF Financial Strategies and Instruments Roundtable, Q.7

an HBP balance is not reduced at the beginning of the year of a contribution repayment by the repayment amount until the repayment is made

An individual separates in September 2021 and wishes to use the individual’s HBP to purchase a new qualifying home in January 2022. All eligibility requirements for the HBP are otherwise met. However, having previously participated in the HBP, there is a balance of $5,000 remaining to be repaid at the time of the HBP withdrawal on January 20, 2022. The individual intends to make an RRSP contribution of $5,000 in February 2022, following the HBP withdrawal, and report this as a repayment of his HBP balance for the 2021 taxation year.

Would this satisfy the condition in s. 146.01(1) – regular eligible amount - para. (i) that the HBP balance be nil at the beginning of the 2022 withdrawal year? In responding negatively, CRA stated:

[O]nly after the individual has actually contributed amounts to the individual’s RRSP, no later than the first 60 days of the year, and indicated the total amount contributed as an HBP repayment for the previous taxation year on the prescribed form … will the individual be able to declare that the individual’s HBP balance is nil at the beginning of the calendar year.

… [W]hen the individual makes a withdrawal from the individual’s RRSP on January 20, 2022, his HBP balance at the beginning of the year 2022 for the purposes of the definition of "regular eligible amount" will [still] be $5,000 … because no HBP repayments have yet been made and reported on the prescribed form.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(1) - HBP Balance HBP balance not reduced until s. 146.01(3) repayment is made and prescribed form filed 205

Subsection 146.01(1)

Subsection 146.01(2)

Paragraph 146.01(2)(b)

Administrative Policy

7 January 2016 External T.I. 2015-0610201E5 F - HBP-Acquisition of a condominium unit

meaning of vacant possession

After referencing the vacant possession test, CRA stated (TaxInterpretations translation):

[W]hen the individual receives the keys to the unit, and the time at which it is agreed with the vendor that the individual can move in, are key factors.

Words and Phrases
vacant possession

Paragraph 146.01(2)(d)

Administrative Policy

5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 8, 2018-0761541C6 F - HBP withdrawals straddling two calendar years

factors considering in extending period for making backdated withdrawals

At the 2010 APFF Financial Strategies and Instruments Roundtable, a Finance representative indicated that one of the factors which CRA could take into account in determining whether an HBP withdrawal made after January of a year was to be deemed under s. 146.01(2)(d) to have been received at the end of the preceding year, was whether the RRSP balance at that year end was sufficiently elevated to support that withdrawal. If often occurs that a purchase that is made in one year does not close until after January of the following year.

If the RRSP balance on December 31, 2017 is sufficient to cover the RRSP withdrawal subsequent to January of 2018, will CRA automatically apply its discretion under s. 146.01(2)(d) such that the withdrawal is deemed to have been made at the end of 2017; and which other factors if any does CRA take into account in exercising that discretion? CRA responded:

The mere fact that, in the situation described, the RRSP balance at December 31, 2017 is sufficient to cover the RRSP withdrawal made in 2018, at a time that is after January 2018, would not, in itself, be sufficient for that Ministerial discretion to be automatically applied, since only a full examination of the facts and circumstances of a particular situation can permit the exercise of that discretion.

In exercising her discretion, the Minister may consider, in addition to the RRSP balance at December 31, 2017, the dates on which the amounts required for withdrawal were contributed and the reasons for the withdrawals being made over a period that straddled two calendar years. However, this is not an exhaustive list. …

HBP participants who withdraw over more than one year will generally be contacted by the CRA to confirm details of their participation.

Subsection 146.01(2.1)

Paragraph 146.01(2.1)(a)

Administrative Policy

7 October 2021 APFF Financial Strategies and Instruments Roundtable Q. 5, 2021-0903871C6 F - HBP - Breakdown of marriage or common-law partners

when two spouses separate in the same co-owned house, one can make an HBP withdrawal to purchase the co-ownership interest of her spouse

Two spouses (Mr. X and Ms. Y), who had been living in a home owned by Mr. X, did not cease to be spouses when they started living separate and apart in the same house, as such status would not cease until divorce. Accordingly, in order for a withdrawal, made later in the same year of their having started to live separate and apart, from her RRSP to qualify as a home buyer plan (HBP) withdrawal, resort was necessary by Ms. Y to s. 146.01(2.1)(a), which would deem both her and Mr. X not to have owned an owner-occupied home 90 days after such separation date, so that Ms. Y would not be precluded from making an HBP withdrawal by virtue of her spouse (Mr. X) in fact having been such an owner-occupant.

It would make no difference if the house was co-owned by the two spouses (or if they were common-law partners) – rather than owned only by Mr. X. Again, once they had been living separate and apart for 90 days, then s. 146.01(2.1)(a) would deem Ms. Y and her spouse not to have had an owner-occupied home, provided that she satisfied the additional condition (in 146.01(2.1)(a)(iii)(A)) that she will have disposed of her co-ownership interest by the end of the second calendar year following that of her HBP withdrawal. Furthermore, in light of s. 146.01(2.1)(b), the “qualifying home” acquired by Ms. Y for HBP purposes could be the co-ownership interest of her spouse.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (f) individual could make an HBP withdrawal after she started living separate and apart (but still in same house) from her common-law partner 113
Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Common-Law Partner former common-law partners can live separate and apart in the same house, and cessation of their status is effective the first day 193

Subsection 146.01(3)

Administrative Policy

25 February 2011 External T.I. 2010-0387991E5 F - RAP, intention, lieu principal de résidence

timing of HBP balance reduction

After confirming that the test under “regular eligible amount” – para. (a) was one of intention at withdrawal time rather than of whether the acquisition of the qualifying home actually closed within the follow year, CRA went on to state:

[A]s required by the definition of "regular eligible amount" in subsection 146.01(1), to access the HBP in a year, the "HBP balance" within the meaning of subsection 146.01(1) must be nil on the 1st day of January of the year of withdrawal (footnote 4). To that end, in accordance with the definition of the HBP balance in subsection 146.01(1) as well as subsection 146.01(3), contributions made to an RRSP in the first 60 days of the year and designated as a HBP repayment for the preceding year will reduce the HBP balance in determining if the balance on January 1 is nil.

Locations of other summaries Wordcount
Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (a) test is one of intention at withdrawal time and not whether closing actually occurred 136