Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.
Principal Issues: 1-What is considered an aged person for the application of paragraph 149(1)(i).
2- Is paragraph 149(1)(i) met if a corporation accepts a tenant that would not be considered as aged.
Position: 1- Question of fact. Generally 55 and over.
2- No
Reasons: 1- The Act does not contain an age threshold however, it is generally accepted that people who are 55 and over can be considered to be aged.
2- Paragraph 149(1)(i) requires that the corporation be constituted and operated exclusively for the purposes of providing low-cost accommodation housing for aged.
XXXXXXXXXX 2007-025696
Catherine Ayotte, Notaire, M. Fisc.
February 27, 2009
Dear XXXXXXXXXX :
Re: Qualification of housing corporation under paragraph 149(1)(i) of the Act
This is in reply to your letter of October 24, 2007 in which you requested our views on paragraph 149(1)(i) of the Income Tax Act (the Act) in the situation described below.
The particular circumstances outlined in your letter relate to a factual situation involving a specific taxpayer. As explained in Information Circular 70-6R5, Advance Income Tax Rulings, this Directorate does not comment on transactions involving specific taxpayers except by way of an advance income tax ruling in respect of proposed transactions. When the situation involves a completed transaction, the question should be directed to the appropriate Tax Services Office for their views, along with all relevant facts and documentation. However, we are prepared to offer the following general comments which may be of assistance. These comments are not binding on the Canada Revenue Agency (CRA).
The Facts
A non-profit corporation that would meet all the requirements to be a housing corporation under paragraph 149(1)(i) of the Act has received legal advice that it cannot exclude certain tenants from its building because of their age considering section 10 of the Québec Charter of Human Rights and Freedoms (the Charter) which states that:
"Every person has a right to full and equal recognition and exercise of his human rights and freedoms, without distinction, exclusion or preference based on race, colour, sex, pregnancy, sexual orientation, civil status, age except as provided by law, religion, political convictions, language, ethnic or national origin, social condition, a handicap or the use of any means to palliate a handicap.
Discrimination exists where such a distinction, exclusion or preference has the effect of nullifying or impairing such right."
As a result, the corporation could provide accommodation to a person 50 years of age or under.
Questions
Is there a minimal age threshold that the CRA considers necessary to meet the aged criterion in paragraph 149(1)(i) of the Act?
Can a corporation constituted exclusively for the purpose of providing low-cost housing accommodation for the aged be subject to paragraph 149(1)(i) of the Act where it accepts tenants who are not aged in order to comply with the Charter ?
Can a corporation issue tax receipts if it is constituted exclusively to provide low-cost housing to the aged but may be forced to accept as tenants individuals who are not aged?
Our Comments
In order to be considered a housing corporation for the purpose of paragraph 149(1)(i), a corporation must exclusively provide low-cost housing accommodation for the aged. CRA would not generally question the status of a corporation renting only to individuals aged 55 and over.
However, in our view, a corporation that provides housing to people aged 50 or under is not operating exclusively for the purposes of providing low-cost housing accommodation for the aged and is not, for the purposes of paragraph 149(1)(i), constituted exclusively for that purpose and will fail to qualify for the exemption under that paragraph.
The definition of "charitable gifts" under subparagraph 110.1(1)(a)(iii) of the Act includes a gift made to a housing corporation resident in Canada and described in paragraph 149(1)(i). In order to be entitled to issue tax receipts, a housing corporation must meet all the requirements described under paragraph 149(1)(i).
Please note that the role of the CRA is to administer and enforce the Act as passed by Parliament. Amendments to the Act are the responsibility of the Department of Finance. If you view that a corporation that satisfies the requirements under paragraph 149(1)(i) of the Act could violate the Charter, you may write to the officials in the Tax Policy Branch of the Department of Finance, L'Esplanade Laurier, 140 O'Connor Street, Ottawa, Ontario, K1A 0G5.
We trust our comments will be of assistance to you.
Yours truly,
Ghislain Martineau
Gestionnaire de la section du secteur financier et des entités exonérées
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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