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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
1. Is a taxpayer eligible under the HBP if he owned and occupied a home in the restricted period, but will not designate it as his "principal residence"?
2. Does residence for provincial health tax purposes have any bearing on eligibility under the HBP?
Position:
1. No
2. No
Reasons:
1. The principal residence designation in paragraph 40(2)(b) of the Act is not relevant to the requirements in paragraph (e) of the definition of "regular eligible amount" in subsection 146.01(1) of the Act.
2. The taxpayer will not qualify under the HBP if he owned a home and inhabited it as his principal place of residence in the restricted period.
XXXXXXXXXX 2001-007515
S. E. Thomson
May 10, 2001
Dear XXXXXXXXXX:
Re: Eligibity under the Home Buyers' Plan
This is in response to your letter dated February 14, 2001, and our telephone conversation (Thomson/XXXXXXXXXX ) of April 4, 2001. You asked us for our views on whether you and your wife qualify to withdraw under the Home Buyers' Plan (HBP).
You and your family moved from XXXXXXXXXX to XXXXXXXXXX. You purchased a house in XXXXXXXXXX, and lived there until XXXXXXXXXX while you attended university. As a student, you were unable to acquire medicare coverage in XXXXXXXXXX, and were required to continue your coverage under the XXXXXXXXXX medicare plan. You did not intend to keep the house in XXXXXXXXXX, and did not intend to designate the house as your principal residence.
The situations described in your letter appear to involve actual ongoing transactions involving specific taxpayers, therefore the responsibility for determining the tax consequences arising from them rests with the local tax services offices. Although we cannot comment directly on your situation, we are able to provide you with the following general comments. As such, these comments are not binding on the Canada Customs and Revenue Agency.
Paragraphs (e) and (f) of the definition of "regular eligible amount" in subsection 146.01(1) of the Income Tax Act (the "Act") provide that an amount withdrawn from a registered retirement savings plan (RRSP) will not qualify under the HBP if the taxpayer or his spouse had an "owner-occupied home" in the period that began at the beginning of the fourth preceding calendar year that ended before the withdrawal, and ended on the 31st day before the withdrawal. Paragraph 146.01(2)(a.1) of the Act considers an individual to have had an "owner-occupied" home where the individual owns, whether jointly with another person or otherwise, a housing unit that is inhabited by the individual as the individual's "principal place of residence".
The expression "principal place of residence" is not defined in the Act, however, in our view, the sole fact that a property has not been designated by a taxpayer for purposes of the principal residence exemption in paragraph 40(2)(b) of the Act is not sufficient grounds to say that it is not the taxpayer's "principal place of residence".
Similarly, whether a taxpayer is able to obtain medical coverage as a permanent resident of the province has no bearing on determining whether the taxpayer had an owner-occupied home in a particular period.
We trust that our comments will be of assistance.
Yours truly,
Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate
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