Definitions for HBP

Arm's length

At arm's length is a concept describing a relationship in which the parties are acting independently of each other. The opposite, not at arm's length, includes individuals:

• related to each other by blood, marriage, adoption, or common-law partnerships; or
• acting in concert without separate interests, such as those with close business ties.

An individual is not at arm's length with a corporation they control.

Eligible withdrawal

This is an amount you withdraw from your RRSP after you have met the HBP conditions that apply to your situation.

HBP balance

When you withdraw funds from your RRSPs under the HBP, you create an HBP balance. Your HBP balance at any time is the total of all eligible withdrawals you made from your RRSPs minus the total of all amounts you designated as an HBP repayment and amounts included in your income (because they were not repaid to your RRSPs) in previous years.

Participant

You are considered an HBP participant if:

• you make an eligible withdrawal from your RRSP to buy or build a qualifying home for yourself;
• you make an eligible withdrawal from your RRSP to buy or build a qualifying home for a related person with a disability or to help such a person buy or build a qualifying home; or
• you are the spouse or common-law partner of a deceased HBP participant and you have elected to continue making the repayments of the deceased participant.

Participation period

Your HBP participation period starts on January 1 of the year you make an eligible withdrawal from your RRSP and ends in the year your HBP balance is zero.

Person with disability

You are considered a person with a disability if you are entitled to the disability amount. For purposes of the HBP, a person with a disability includes you or a person related to you by blood, marriage, common-law partnership or adoption. A related person with a disability does not have to reside with you in the same home.

We consider a person to be entitled to the disability amount if one of the following situations applies:

• the person was entitled to the disability amount on line 316 of his or her tax return for the year before the HBP withdrawal, and still meets the eligibility requirements for the disability amount when the HBP withdrawal is made; or
• the person was not entitled to the disability amount for any year before the HBP withdrawal, but a Form T2201, Disability Tax Credit Certificate, certified by a medical doctor or appropriate medical practitioner (that is, an optometrist, audiologist, psychologist, physiotherapist, occupational therapist or speech language pathologist), is filed for the person for the year of the HBP withdrawal. If Form T2201 is not approved, your withdrawals will not be considered eligible withdrawals under the HBP, and will have to be included in your income for the year you receive them.

If all other eligibility requirements are met, we consider a person to be entitled to the disability amount even if costs for an attendant or for care in a nursing home were claimed as a medical expense by or on behalf of that person.

Qualifying home

A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.