4 June 2004 External T.I. 2004-0075241E5 - Home Buyers' Plan

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 is a first-time homebuyer if the individual's spouse has an owner-occupied home?

Position: No, if the individual's spouse owned a home that was the spouse's principal place of residence and that was inhabited during the marriage at any time in the 4-year period.

Reasons: Paragraphs e) and f) of the definition of "regular eligible amount" in subsection 146.01(1).

XXXXXXXXXX 						2004-007524
						Michel Lambert
June 4, 2004

Dear XXXXXXXXXX:

Re: Home Buyers' Plan

This is in reply to your facsimile transmission of May 10, 2004 in which you ask if you are eligible to participate to the Home Buyers' Plan (HBP) in the situation where you have been separated from your wife since 1998 and your wife has and continues to live in the house that you bought together prior to 1998. Since you are still a registered owner of the house that you have not lived in since 1998 you would like to know if you could be considered a first-time homebuyer.

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. Where the particular transactions are completed, the inquiry should be addressed to the relevant tax services office. However, we are prepared to provide the following comments.

The Agency's general views regarding the HBP are in the guide RC4135 Home Buyers' Plan. In order to participate in the HBP, an individual has to satisfy several conditions which are described in that guide.

One of the conditions required for participation in the HBP is that the individual qualify as a first-time homebuyer. For participation in 2004, an individual would not be considered a first-time homebuyer if, at any time during the period beginning January 1, 2000 and ending 31 days before any HBP withdrawal in 2004, 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 was inhabited by the individual as the individual's principal place of residence at any time in the required period.

Where an individual did not have an owner-occupied home for the required period or where he or she did not reside with his or her separated spouse in the owner-occupied home of the separated spouse in that period, the individual will be considered a first-time homebuyer. This would be the case even though the individual is a registered owner of the home that is inhabited by his or her separated spouse. We note that the determination of whether an individual lived in an owner-occupied home in the qualifying period is always a question of fact.

We trust the foregoing comments are of assistance.

for Director
Financial Industries Division
Income Tax Rulings Directorate
Policy and Planning Branch