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 a withdrawal from an RRSP meets the condition of subparagraph (b)(ii) of the definition of “supplemental eligible amount” in subsection 146.01(1).
Position: Yes.
Reasons: The purpose of the withdrawal is to enable the disabled person to live in an environment better suited to their personal needs and care.
XXXXXXXXXX 2019-081967
D. Odubella
January 30, 2020
Dear XXXXXXXXXX:
Re: Home Buyers’ Plan
We are writing in response to your letter that we received on August 13, 2019 concerning your eligibility to participate in the Home Buyers’ Plan (“HBP”). We apologize for the delay in our response.
Specifically, we understand that you wish to withdraw funds from your registered retirement savings plan (“RRSP”) under the HBP to purchase a home that is located in the district of a school that has a specialized program suitable for your daughter’s educational needs. Your daughter has XXXXXXXXXX disability and is entitled to the disability amount. Your spouse currently owns a home outside of the school district, which was purchased in 2019 under time constraints following XXXXXXXXXX. Given the limited school resources for your daughter’s needs in the area in which the existing home is located, your family recently moved to temporary rental accommodations within the school district to allow your daughter to attend the school while looking for a permanent home.
Our comments
This technical interpretation provides general comments about the provisions of the Income Tax Act and related legislation (where referenced). It does not confirm the income tax treatment of a particular situation involving a specific taxpayer but is intended to assist you in making that determination. The income tax treatment of particular transactions proposed by a specific taxpayer will only be confirmed by this Directorate in the context of an advance income tax ruling request submitted in the manner set out in Information Circular IC 70-6R9, Advance Income Tax Rulings and Technical Interpretations.
The Canada Revenue Agency’s general views regarding the HBP are available at https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html.
Generally, an individual must qualify as a first-time home buyer to participate in the HBP. However, this condition does not apply if an individual withdraws funds from their RRSP to buy or build a home for a related person with a disability as long as certain conditions are met. These conditions include a requirement that the purpose of the RRSP withdrawal is to enable the disabled person to live in a more accessible dwelling or in an environment better suited to their personal needs and care.
We are unable to comment on whether you would be eligible to participate in the HBP. This is a factual determination and we do not have all of the facts. However, it would appear from the information in your letter that the main issue of concern is the requirement described above.
In our view, the purchase of a home in the situation described above would meet this requirement as the purpose of the RRSP withdrawal would be to enable your daughter to live in an environment better suited to her personal needs and care.
We trust our comments will be of assistance.
Yours truly,
Dave Wurtele
Section Manager
for Division Director
Financial Industries and Trusts Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch
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