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: Would the taxpayer qualify under the HBP if they had an owner-occupied home outside of Canada during the prior four calendar years?
Position: No.
Reasons: An individual is considered to have an owner-occupied home if he or she owns a housing unit, whether inside or outside Canada, which is inhabited by the individual at any point in time as the individual's principal place of residence.
XXXXXXXXXX
2013-050261
E. Wirag
(613) 957-2090
October 18, 2013
Dear XXXXXXXXXX,
We are replying to your letter dated June 24, 2013 in which you asked for our comments regarding the eligibility of a withdrawal from a Registered Retirement Savings Plan ("RRSP") under the Home Buyers Plan ("HBP").
In your letter you state that you moved to Canada in XXXXXXXXXX and that you owned a residence outside of Canada from XXXXXXXXXX through XXXXXXXXXX. You are enquiring whether owning a residence outside of Canada would be relevant in determining whether you are eligible to participate in the HBP.
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 submitted in the manner set out in Information Circular 70-6R5, Advance Income Tax Rulings, dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. Where a particular transaction has already been completed, a review of the relevant facts and circumstances surrounding the situation would be required. Such review would normally be conducted by the applicable Tax Services Office ("TSO") during the course of an income tax audit which, if undertaken, would be carried out after the particular taxpayer has prepared and filed its income tax return for the year. Notwithstanding the foregoing, we are prepared to provide the following general comments that may be of assistance.
The Canada Revenue Agency's (CRA) general views regarding the HBP are contained in the Guide RC4135, Home Buyers Plan at
http://www.cra-arc.gc.ca/E/pub/tg/rc4135/README.html.
There are numerous conditions that you must meet before you may withdraw funds from an RRSP under the HBP to buy or build your qualifying home. Included is the requirement that you meet the first time home buyers condition. You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.
An individual is considered to have an owner-occupied home if he or she owns a housing unit, whether inside or outside Canada, which is inhabited by the individual at any point in time as the individuals principal place of residence.
Providing you meet all the other requirements, determining the point in time when your foreign residence ceased to be your principal place of residence is a question of fact that you must ascertain in order to determine if you meet the first time home buyers' condition.
For your information, once you have made a determination of this fact for the purposes of the HBP, it is important that you have also considered whether there are any additional tax considerations outside of the HBP. An example may be the possible reporting of capital gains. Income Tax Folio S1-F3-C2: Principal Place of Residence - http://www.cra-arc.gc.ca/tx/tchncl/ncmtx/fls/s1/f3/s1-f3-c2-eng.html - may be of assistance to you.
We hope this information is of assistance to you.
Yours truly,
Sharmini Ratnasingham
For Director
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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