Home Buyers' Plan (HBP) RC4135(E) Rev. 08
http://www.cra-arc.gc.ca/E/pub/tg/rc4135/rc4135-e.html#P105_11069
You have to buy or build the qualifying home before October 1 of the year after the year of the withdrawal
Generally, if you participate in the HBP in a particular year, you have to buy or build the qualifying home before October 1 of the year following the year of the withdrawal.
We consider you to have bought or built a qualifying home if you bought or built it alone or with one or more individuals. If you are building a qualifying home, we consider you to have built the home on the date it becomes habitable.
Note
If you are withdrawing funds from your RRSPs under the HBP to help a related person with a disability to buy or build a qualifying home, the person with a disability must meet this condition.
If you do not buy or build the qualifying home before October 1 of the year after the year of the withdrawal, you can:
cancel your participation in the HBP (for more information, see the section called "Cancelling your participation" ); or
buy or build a different home, called a replacement property, before October 1 of the year following the year of the withdrawal.
A replacement property has to meet the same conditions as a qualifying home. You do not have to complete another Form T1036 to advise us that you are buying or building a replacement property. Just send a letter to:
Pension and RRSP Processing Group
Ottawa Technology Centre
875 Heron Road
Ottawa ON K1A 1A2
Give your name, address, and social insurance number, as well as the address (and phone number, if possible) of the replacement property. Also, you have to state in the letter that you intend to occupy the replacement property as your principal place of residence no later than one year after you buy or build it.
Note
If you have already withdrawn from your RRSPs the $20,000 maximum allowed under the HBP, you cannot make any more withdrawals to buy or build the replacement property.
Extensions for buying or building a qualifying home or replacement property - If you do not buy or build the qualifying home you indicated on Form T1036 (or a replacement property) before October 1 of the year following the year of the withdrawal, we still consider you to have met the deadline if either of the following situations applies to you:
You had a written agreement, in effect on October 1 of the year following the year of the withdrawal, to buy a qualifying home or replacement property, and you buy the property before October 1 of the second year following the year of the withdrawal. In addition, you have to be a Canadian resident up to the time of purchase (see Example 4 below).
The year following the year of the withdrawal, you paid an amount before October 1 to the contractors or suppliers (with whom you deal at arm's length) for materials for the home being built, or towards its construction, that was at least equal to the total of your withdrawals under the HBP (see Example 5 below).
Example 4
On February 10, 2006, Steven, a Canadian resident, entered into an agreement to buy a duplex, the ground floor of which he intends to occupy as his principal place of residence. Because of an existing lease, the possession date is May 4, 2008. On February 20, 2006, Steven withdrew $15,000 from his RRSPs under the HBP. On May 4, 2008, he takes possession of the duplex and moves in.
Since Steven withdrew his funds in 2006, he had to buy the home before October 1, 2007. Although Steven took possession of the home after this deadline, we consider him to have bought the home by the deadline because he had an agreement in effect on October 1, 2007, he bought the home before October 1, 2008, and he was a Canadian resident when he bought it.
Example 5
In January 2007, Clara withdrew $10,000 from her RRSPs under the HBP. Earlier in the same month, she had finalized a contract to have her home built, and had paid $2,000 to the contractor. She paid $5,000 when construction started in April 2007, and $6,000 more in August 2008, for a total of $13,000. Clara dealt at arm's length with the contractor.
Construction of the home is not completed until December 15, 2008, because the building materials arrived late. Since Clara withdrew her funds in 2007, she has to have the home built before October 1, 2008. Although construction of the home is not completed until December 15, 2008, we consider Clara's home to have been built by the deadline because the $13,000 she paid towards its construction before this deadline is more than the total amount of her withdrawals ($10,000), and because she dealt at arm's length with the contractor
