Home Buyers' Plan Repayment on Separation in Ontario

If you took money out of your RRSP under the Home Buyers' Plan (HBP) and your relationship has since ended, you may be wondering who has to repay it, what tax follows if repayments stop, and whether the balance matters when property is divided.

This article walks through the repayment rules in plain terms and points out where the answer depends on your own facts. The tax rules and the property rules are separate systems, so it helps to look at both.

How HBP repayment works

The current HBP withdrawal limit is $60,000, and amounts must be repaid within a 15-year period. The required annual repayment is the HBP balance divided by the years left in the repayment period.

Repayments are made as RRSP, PRPP or SPP contributions in the year or in the first 60 days after the year, and are designated on Schedule 7. The participant must keep filing returns until the balance is repaid or included in income.

What happens if you miss a repayment

If you designate less than the required repayment, the shortfall is included in your income on line 12900. The Income Tax Act sets this out with a formula in s. 146.01(4), in which a year count tracks how many years have passed since the repayment period began.

This is a tax cost for the participant, so it matters even if the relationship has ended and cash is tight. Any separation agreement or court order should be drafted with that in mind.

The start of the repayment period

For first HBP withdrawals made from January 1, 2026 to December 31, 2028, the CRA states that the start of the 15-year repayment period is deferred to the fifth year after the year of the first withdrawal. A 2026 withdrawal would mean a first repayment year of 2031. Under the earlier rules the period started in the second year.

Because this change has been described in different places as both in effect and proposed, confirm with the CRA or an accountant which rule applies to your withdrawal year before you rely on it.

Using the HBP when you are separated

If you are separating and want to buy a new home, the plan can still be available. You can use it if you live separate and apart from a spouse at the time of withdrawal and the separation began in the withdrawal year or any of the four preceding years.

A previously owned home must be disposed of within two years after the end of the withdrawal year, and that requirement is waived if the owner buys out the former spouse's share. Withdrawal is not allowed if the home is owned and occupied by a new spouse.

HBP balances and property division

For married spouses, property acquired during the marriage is generally split equally, with an equalization payment owed to the spouse with the smaller share. How an RRSP and any outstanding HBP balance are counted in that calculation is a question to put to a lawyer and an accountant, since it depends on the facts.

How an HBP repayment fits into property division depends on your situation, so it is worth confirming with a lawyer. Spouses can address this kind of item in a domestic contract such as a separation agreement. The time limit for a married spouse's property claim is six years from the day of separation or two years from the day the divorce is final, whichever comes first.

What to do next

• Find out your current HBP balance and your next required repayment.
• Note the year of your first withdrawal and confirm which repayment start date applies.
• Gather RRSP statements showing the withdrawal and any repayments.
• Plan RRSP contributions early enough to designate them on Schedule 7.
• Ask your lawyer how the HBP balance should be reflected in a settlement.
• Ask an accountant about the tax effect of any shortfall.

Frequently asked questions