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: Is a motor home that is located outside Canada in the winter months and returned to Canada for the warmer months considered a “qualifying home” for purposes of the Home Buyers’ Plan?
Position: No.
Reasons: A “qualifying home” is defined in subsection 146.01(1) of the Act to mean “a housing unit located in Canada”. If a motor home is located outside Canada in the winter months and returned to Canada for the warmer months, the motor home will not satisfy one of the conditions required by section 146.01 of the Act to be a qualifying home.
XXXXXXXXXX 2011-042397
A. Mahendran
June 27, 2012
Dear XXXXXXXXXX:
Re: Home Buyers' Plan – Qualifying Home
This is in reply to your letter dated October 3, 2011 requesting a technical interpretation regarding the RRSP Home Buyers’ Plan (the “HBP”) for a person with disabilities qualifying for the disability tax credit. You have described a situation where you are planning to purchase a small motor home as your permanent residence, making it possible to travel south for the winter and return to Canada for the warmer months. Specifically, you would like to confirm in advance as to whether a motor home is considered a qualifying home for purposes of the HBP.
Our comments:
Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Rulings", dated May 17, 2002. This Information Circular can be accessed on the internet at http://www.cra-arc.gc.ca. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.
Pursuant to section 146.01 of the Income Tax Act (the "Act"), an individual can withdraw funds from the individual's RRSP to buy or build a “qualifying home”. A “qualifying home” is defined in subsection 146.01(1) of the Act to mean “a housing unit located in Canada”. Accordingly, a qualifying home for purposes of the HBP must satisfy two requirements: (1) it must be a housing unit, and (2) it must also be located in Canada.
The term "housing unit" is not defined in the Act; however, the term has been given a broad meaning in jurisprudence. Paragraph 3 of Interpretation Bulletin IT-120R6, Principal Residence, and Guide RC4135, Home Buyers’ Plan, list types of properties that are considered "housing units" and these include a mobile home. A motor home is a type of mobile home that is considered a housing unit for purposes of section 146.01 of the Act and therefore, satisfies the first requirement. However, the motor home must also satisfy the second requirement, which is it must be located in Canada, in order to be a qualifying home. Accordingly, a motor home would be considered a qualifying home as long as it is located in Canada. If a motor home is located outside Canada in the winter months and returned to Canada for the warmer months, we are of the view that the motor home will not satisfy the conditions required by section 146.01 of the Act and therefore, it is not considered to be a qualifying home for purposes of the Home Buyers’ Plan.
The CRA's general views regarding the HBP are expressed in Guide RC4135, Home Buyers' Plan. In order to participate in the HBP, the individual has to meet several conditions as described in that guide. Whether a specific individual would meet all of these conditions is a question of fact.
We trust the above comments are of assistance.
Yours truly,
Sharmini Ratnasingham
Assistant Director
For Director
Financial Industries Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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