Home Buyer Plan and TN Visa

Hello Everyone,

My company is moving me from our Toronto office to NY on a TN Visa.

I purchased a home 3 years ago and pulled the maximum amount from my RRSPs (20k). My question is whether I must pay the total remaining balance (~18k) if I move to NY this June.

According to a government doc I found...

"You may cease to be a resident of Canada after a qualifying home is bought or built. If this is the case, you have to repay the balance of the funds you withdrew under the HBP before the date you file your return for the year, or no
later than 60 days after you cease to be a Canadian resident, whichever date is earlier. If you do not make the repaymentby this deadline, you have to include the amount that you have not repaid in your income for the year that youbecame a non-resident. The amount is included in income for the period you were resident in Canada."

In short, it sounds as though I have to suddenly pay the entire balance in a single shot, 60 days after I leave for NY. Not a great option for me since I plan on renting my place while I am away.

Am I officially "ceasing to be a Canadian resident" when I leave on a TN Visa? Does owning a home help to maintain my Canadian residency? I may end up selling my home before I leave. Does that force me to pay back the entire remaining balance in one shot? The preference would be to pay minimums back until the 15 year period is up.

Thanks and my apologies for the silly question.

Best regards,
Rich

It's up to you if you want to remain a Canadian for tax purposes, it's just a question of filing the right forms. If you're on TN-1 for a short period of time it's usually not worth the hassle of moving your tax home to the US unless you're making a mint and can afford a good accountant.

Obviously if you do move it, you run into the problem you've outlined (and other ones besides, such as departure tax).

Have a read of: http://www.cra-arc.gc.ca/E/pub/tg/p151/README.html which gives you an overview.

The flip side is if you're staying in the US for a long time you usually end up paying more tax if you remain resident in Canada for tax purposes, although given how high NY taxes are that's not such a major issue in this scenario.

A TN VISA has a temporary effect meaning that you are expected to return to Canada in some point.

If you are planning to stay in Canada and you have ties in Canada even after moving to US (family, children are in Canada) then you are still a resident in Canada and you will need to file the income tax here.

Once you cease to be a Canadian resident, you are not entitled to Canadian income tax laws and these include the home buyer plan. I encourage you to inquire CRA about your residency status. It really does not hurt. They might tell you will need to file your income tax in Canada to keep your RRSPs and keep the home buyer plan.