How to cancel participation in the Home Buyers’ Plan?

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Can you cancel your participation in the HBP?

If you withdraw funds from your RRSPs and otherwise met all the HBP conditions, you generally cannot cancel your participation.

Exception

You can cancel your participation in the HBP only if one of the following situations applies:

  • you did not buy or build a qualifying home or replacement property; or
  • you became a non-resident before buying or building a qualifying home or a replacement property.

You can also cancel your participation, if you withdrew funds under the HBP to help a related person with a disability acquire a home, and:

  • that person does not buy or build a qualifying home or replacement property; or
  • you become a non-resident before that person buys or builds a qualifying home or a replacement property.

Notes

If you elect to cancel and repay to your RRSPs the full amount you withdrew under the HBP, your withdrawal will not be taxed. Any portion of your withdrawal that is not repaid will have to be included in your income for the year you received the funds.

You can make your cancellation payment(s) to any of your existing RRSPs, or a new RRSP for yourself, or your pooled registered pension plan (PRPP).

How to cancel your participation?

To cancel your participation in the HBP and to repay all the money you withdrew from your RRSP, do the following:

  1. Make a cancellation payment(s) to any of your existing RRSPs, or a new RRSP for yourself by the due date.
  2. Write a letter to the CRA explaining the reason for your cancellation or fill out Form RC471, Home Buyers’ Plan (HBP) Cancellation.
  3. Attach your cancellation payment receipt(s) for any repayment(s) to your letter or to the filled out RC471.
  4. Send both the receipt(s) and the letter or the filled out Form RC471 to the CRA at the address below.

To cancel your participation in the HBP and not repay some or all of the money you took out of your RRSP, do the following:

  1. Make a partial cancellation payment(s) to any of your existing RRSPs, or a new RRSP for yourself by the due date.
  2. Write a letter to the CRA explaining the reason for your cancelation or fill out Form RC471, Home Buyers’ Plan (HBP) Cancellation.
  3. Attach your cancellation payment receipt(s) for any repayment(s) you made to your letter or to the filled out RC471.
  4. Send both the receipt(s) and the letter or the filled out Form RC471 to the CRA at the address below.
  5. Enter the amount you did not repay on line 129 of your tax return for the year you withdrew the funds.

Note

In both cases above, the cancellation letter must include the following information:

  • the reason why your participation in the HBP is being cancelled;
  • the last name, first name, complete address, and social insurance number of the participant; and
  • the participant’s signature.

Send all the information to:

Pension Workflow Section
Ottawa Technology Centre
875 Heron Road
Ottawa ON K1A 1A2

When to make your cancellation payments?

If you cancel your participation because you did not buy or build a qualifying or replacement property, your cancellation payments are due by December 31 of the year after the year you received the funds.

If you become a non-resident after you receive the funds and before you buy or build a qualifying home, your due date for the HBP repayment will depend on when you became a non-resident:

  • If you were a non-resident at the time you filed an tax return for the year you received the funds, make an HBP cancellation payment to any of your existing RRSPs, or a new RRSP for yourself by the earliest of the following dates:
    • December 31 of the year after the year you received the funds; or
    • the day you filed an tax return for the year you received the funds.
  • If you became a non-resident after you filed an tax return for the year you received the funds, you must make your HBP cancellation payment to your RRSPs, or a new RRSP for yourself by December 31 of the year after the year you made the withdrawal.

If you do not make an HBP repayment or a cancellation payments to any of your existing RRSPs, a new RRSP for yourself, or a PRPP the funds you withdrew must be included as income on line 129 of your tax return for the year you received the funds.

A cancellation payment is not considered to be an RRSP contribution and must not be entered as a contribution in "Part A – Contributions" on Schedule 7. You cannot claim a deduction for this amount on your tax return.

A cancellation payment cannot be made to your PRPP or specified pension plan.
 

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