17 April 2026 External T.I. 2025-1080181E5 - First Time Homebuyer’s Tax Credit Transition Grant

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: What is the tax treatment of the Saskatchewan First Time Homebuyer’s Tax Credit Transition Grant, which is available to eligible individuals who claimed the First Time Homebuyer’s Tax Credit for the 2024 tax year?

Position: The Grant is not considered to be income from a source, and, therefore, it does not need to be included in the recipients' income.

Reasons: The Grant is not based on a means, needs, or income test (therefore, it does not fall under the ambit of paragraph 56(1)(u)) and it does not fall under any of the other income sources under the Act.

XXXXXXXXXX 2025-108018
Randa El-Kadi

April 17, 2026

Dear XXXXXXXXXX:

Re: Tax treatment of grants under the Saskatchewan First-Time Homebuyers’ Tax Credit Transition Grant Program

We are writing in response to your correspondence dated September 24, 2025, in which you request our views regarding the tax treatment of a grant received under the Saskatchewan First-Time Homebuyers’ Tax Credit Transition Grant Program (the Program).

We understand that the Program was established for eligible homebuyers in order to support making the purchase of a first home more affordable. Eligible homebuyers are individuals who claimed, and received, the Saskatchewan First-Time Homebuyers’ Tax Credit (the Credit) for 2024, and whose home was registered with Information Services Corporation from October 1 to December 31, 2024. The one-time grant, which is up to $525, reflects the amount by which the maximum value of the Credit was increased for the 2025 tax year.

Our comments

This technical interpretation provides general comments about the provisions of the Income Tax Act (the 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 70-6R12, Advance Income Tax Rulings and Technical Interpretations.

The determination of the income tax treatment of a particular payment is a question of fact that is based on the nature and purpose of the payment.

An amount is generally included in a taxpayer’s income for a tax year if it constitutes income from a source under section 3 of the Act or if a specific provision of the Act applies to the type of payment being received. If the income does not fall within one of these sources of income, it is generally not included in the taxpayer’s income for income tax purposes.

Paragraph 56(1)(u) of the Act requires that social assistance payments received in the year and made on the basis of a means, needs, or income test are to be included in a taxpayer’s income unless such amounts are required to be included in the taxpayer’s income or the income of the taxpayer’s spouse or common-law partner under a different provision of the Act. Amounts included in a taxpayer’s income under paragraph 56(1)(u) of the Act are offset by a matching deduction under paragraph 110(1)(f) of the Act, so that there are no income tax implications related to this income inclusion other than it may affect certain income-tested benefits.

The first requirement in paragraph 56(1)(u) of the Act is that the amount must be “social assistance”. The term “social assistance” is not defined in the Act. Generally, social assistance means aid provided by a government or government agency on the basis of a need. Based on the limited information provided, the grant received under the Program would likely fall within the general meaning of social assistance.

The second requirement in paragraph 56(1)(u) of the Act is that the payment must be made on the basis of a means, needs or income test. We consider each one of these tests to be a financial test and they are described as follows:

• An “income” test is based solely on the income of the individual.
• A “means” test is similar to an income test, but also takes into account the assets of the individual.
• A “needs” test takes into account the income, assets and financial needs of the individual.

While the grant received under the Program could be viewed as social assistance within the broad meaning of that term, it is our understanding that it is not made on the basis of a means, needs, or income test. Therefore the grant would not be included in the recipients’ income under paragraph 56(1)(u).

Moreover, no other provision of the Act has been identified that would require the inclusion of such a payment in the recipient’s income in the circumstances described. As such, it is our view that the grant will likely not constitute income from a source for purposes of the Act, and, therefore, will not be included in the recipient’s income.

We trust that these comments will be of assistance to you.

Yours truly,

Eric Wirag, CPA, CMA
Manager, Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch