According to the Canada Revenue Agency (CRA), you are not considered to be a first-time home buyer if you or your spouse or common-law partner owned a home that you occupied as your principal place of residence during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.
You have to meet this condition at the time you withdraw an amount from your RRSPs under the HBP. However, if you are a person with a disability , or you are buying or building a home for a related person with a disability or helping such a person buy or build a home, you do not have to meet this condition. See HBP Condition – Person with a disability.
If at the time of the withdrawal you have a spouse or common-law partner, it is possible that only one of you will be considered a first-time home buyer.
The following example is provided by CRA:
In 2005, Arthur sold his home that he had occupied as his principal place of residence for five years.
He then moved into a rented apartment. In 2006, he met Janet and she decided to move in with him.
Janet was renting her apartment and had never owned a home.
Janet and Arthur plan to get married in August 2008.
They would like to withdraw funds from their RRSPs to participate in the HBP in September 2008.
Since Arthur owned and occupied his home during the period beginning January 1 of the fourth year before the year he wants to make the withdrawal, he is not considered a first-time home buyer, so he cannot participate in the HBP in 2008.
However, Janet is considered a first-time home buyer, since she never owned a home and did not live with Arthur during the period in which he owned and occupied his home as his principal residence. She can participate in the HBP in 2008, as long as all the other requirements are met.
For more information on this topic, visit http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html
