10 February 2003 External T.I. 2002-0178115 - HBP EXCEPTIONS TO ELIGIBILITY REQUIREMENTS

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 CCRA.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ADRC.

Principal Issues:

Can we change the eligibility requirements for the Home Buyers Plan for specific situations?

Position: No.

Reasons: Changes to the law have to be made by Finance.

XXXXXXXXXX 2002-017811

February 10, 2003

Dear XXXXXXXXXX:

Re: Home Buyers' Plan and Exceptional Circumstances

This is in response to your letter of December 9, 2002, wherein you requested an amendment to the existing conditions in the definition of "regular eligible amount" in subsection 146.01(1) of the Income Tax Act (the "Act") to allow a person who inhabited his or her spouse's owner occupied home within the last four years to qualify under the Home Buyers' Plan ("HBP") in exceptional circumstances.

You describe a situation where an individual extracts money from his or her registered retirement savings plan under the HBP to acquire a condominium. The individual subsequently marries and continues to reside in the condominium. Eventually the condominium is listed on the Coalition of Leaky Condo Owners list of leaky condominiums and is disposed of for significantly less than the original purchase price. You ask whether an amendment could be made to the Act to allow the individual's spouse to participate in the HBP in respect of the married couple's acquisition of a new home.

Comments

As you noted, there are no exceptions in the definition of "regular eligible amount" and consequently the individual's spouse in the above situation would not be eligible to participate in the HBP.

We note that the Canada Customs and Revenue Agency is responsible for administering the Act as adopted by Parliament and strives to carry out this goal fairly and uniformly for all taxpayers. Your request for an amendment to the Act is the responsibility of the Department of Finance. We have forwarded your incoming letter and a copy of our response to Mr. Dave Wurtele, Tax Policy Branch of the Department of Finance at L'Esplanade Laurier, 140 O'Connor Street, Ottawa ON K1A 0G5.

We trust that the above comments will be of assistance to you.

Yours truly,

Mickey Sarazin, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate

c.c. Dave Wurtele
Department of Finance