CRA finds that when two spouses separate in the same co-owned house, one can make an HBP withdrawal to purchase the co-ownership interest of her spouse
Two spouses (Mr. X and Ms. Y), who had been living in a home co-owned by them, did not cease to be spouses when they started living separate and apart in the same house, as such status would not cease until divorce. Accordingly, in order for a withdrawal, made later in the same year of their having started to live separate and apart, from her RRSP to qualify as a home buyer plan (HBP) withdrawal, resort was necessary by Ms. Y to s. 146.01(2.1)(a), which would deem both her and Mr. X not to have owned an owner-occupied home 90 days after such separation date, so that Ms. Y would not be precluded from then making an HBP withdrawal by virtue of her spouse (Mr. X) in fact having been such an owner-occupant.
It would make no difference if the house was co-owned by the two spouses (or if they were common-law partners) – rather than owned only by Mr. X. Again, once they had been living separate and apart for 90 days, then s. 146.01(2.1)(a) would deem Ms. Y and her spouse not to have had an owner-occupied home, provided that she satisfied the additional condition (in 146.01(2.1)(a)(iii)(A)) that she will have disposed of her co-ownership interest by the end of the second calendar year following that of the HBP withdrawal. Furthermore, in light of s. 146.01(2.1)(b), the “qualifying home” acquired by Ms. Y for HBP purposes could be the co-ownership interest of her spouse.
Neal Armstrong. Summaries of 8 October 2021 APFF Financial Strategies and Instruments Roundtable, Q.5 under s. 146.01(1) - regular eligible amount – (f), s. 248(1) – common-law partner and s. 146.01(2.1)(a).