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)(i) of the definition of “supplemental eligible amount” in subsection 146.01(1).
Position: Yes.
Reasons: The purpose of the withdrawal is to enable the specified disabled person to live in a dwelling that is more accessible to him.
XXXXXXXXXX 2019-083220
D. Odubella
March 27, 2020
Dear XXXXXXXXXX:
Re: Home Buyers’ Plan and Specified Disabled Person
We are writing in response to your email of November 28, 2019, concerning your eligibility to participate in the Home Buyers’ Plan (“HBP”).
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 more accessible by your XXXXXXXXXX-year-old son. Your son was recently diagnosed with XXXXXXXXXX. He is entitled to the disability amount. You and your family have been living in a three-story home for the past XXXXXXXXXX years, and this home is not suitable for your son’s needs.
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 homebuyer to be eligible 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 email 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 son to live in a more accessible dwelling than his current home.
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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