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: Whether an individual who owns a home but does not reside there is considered a first-time homebuyer with respect to the purchase of a new home intended to be inhabited as the individual's principal place of residence.
Position: No.
Reasons: Based on the facts presented, the individual had an owner-occupied home in the relevant period.
XXXXXXXXXX
2010-035593
Jason R. Ward
(613) 957-9769
June 3rd, 2010
Dear XXXXXXXXXX :
Re: The Home Buyers' Plan
This is in reply to your email of January 29, 2010 in which you requested our comments on whether you would be considered a first-time home buyer for the purposes of the Home Buyers' Plan ("HBP") and would be able to participate in the HBP in 2010.
More specifically, you have indicated that you currently own a condominium unit which is inhabited XXXXXXXXXX . You state that you have never lived at the condominium unit as your principal place of residence, due to the nature of your previous and current employment. You now intend to purchase a new home, which you will inhabit XXXXXXXXXX as your principal place of residence, and are seeking written confirmation that you will qualify as a first-time home buyer under the HBP.
The particular situation outlined in your email appears to relate to a factual one, involving a specific taxpayer. Written confirmation of the tax implications inherent in particular transactions is given by this Directorate only where the transactions are proposed and are the subject matter of an advance income tax ruling request submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. We are, however, prepared to offer the following general comments, which may be of assistance.
The Canada Revenue Agency's general views regarding the HBP are in the guide titled "Home Buyers' Plan (HBP)" (RC4135). In order to participate in the HBP, an individual has to satisfy several conditions, which are described in the Guide.
One of the conditions required for participation in the HBP is that the individual qualify as a first-time home buyer. An individual would not be considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the HBP withdrawal, the individual had an owner-occupied home or the individual's spouse or common-law partner owned a home that the individual occupied as their principal place of residence. An individual will be considered to have an owner-occupied home where the individual owns (jointly or otherwise) a housing unit and the housing unit is inhabited by the individual as the individual's principal place of residence at that time
Therefore, one of the conditions for participation in the HBP in 2010 is that an individual cannot have owned and occupied a home as described above at any time during the period beginning January 1, 2006 and ending 31 days before any HBP withdrawal in 2010.
As stated in Income Tax Technical News #31 ("ITTN 31R2"), an individual's "principal place of residence" is the place where the individual regularly, normally or customarily lives. In our view, the place where the individual normally sleeps is a significant factor in making this determination. Other significant factors include the location of the individual's belongings, where the individual receives his or her mail, and where the individual's immediate family, including the individual's spouse or common-law partner and children, reside. For your information ITTN 31R2 can be found on our website at www.cra-arc.gc.ca.
In our phone conversation of March 12, 2010 (XXXXXXXXXX /Ward), you acknowledged that you did stay at the condominium unit on several occasions within the timeframe specified above, including a XXXXXXXXXX period XXXXXXXXXX . You also confirmed that your personal belongings are kept at the condominium unit, and that your mail is sent there.
In our view, you inhabited the condominium unit as your principal place of residence, and therefore had an owner-occupied home, in XXXXXXXXXX . Consequently, you would not be considered a first-time homebuyer and would not be able to participate in the HBP in 2010.
We trust that these comments will be of assistance.
Yours truly,
Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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