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.
XXXX
N.R. Mitchell (613) 957-2134
May 9, 1988
Dear XXXX
Re: Principal Residence; Sale of Part of Lot
This is in reply to your letter of April 2, 1988. You advise us that you live "on a 1/2 acre + lot", and would like to sell part of your backyard so that a proposed development can gain access to a street.
XXXX
Provided the entire parcel of land on which your residence is located can be designated as your "principal residence" for the purposes of the Act for all the years in which it was owned by you, the sale of part of the lot in the manner indicated can be exempt from tax. The Department's position on this issue is set out in the last sentence to paragraph 15 of the enclosed Interpretation Bulletin IT-120R3 (The "Bulletin"). We would also advise you that only one property per family unit can be designated as a principal residence for a given year.
In the case at hand, it is likely that the whole lot could be designated as a principal residence. We note that you describe the property as being XXXX. Land upon which a principal residence stands and adjoining land that contributes to a taxpayer's use and enjoyment of the residence qualify as part of the principal residence. Where the total area of the land exceeds 1/2 hectare, the amount in excess of that size is not considered to be part of the principal residence unless the taxpayer can demonstrate that it was necessary for the use of the residence. Paragraphs 11 through 14 of the Bulletin and the enclosed News Release dated April 9, 1987 provide further details on this issue.
Should you wish to obtain a definitive reply to the question of your eligibility for the principal residence exemption, we would suggest that you contact the Kitchener District Taxation Office, located at 166 Frederick Street, Kitchener, Ontario, N2G 4N1. That office is in a better position to ascertain the relevant facts of your situation. We trust this letter will be of assistance to you.
Yours truly,
for Director Small Business and General Division Specialty Rulings Directorate Legislative and Intergovernmental Affairs Branch
All rights reserved. Permission is granted to electronically copy and to print in hard copy for internal use only. No part of this information may be reproduced, modified, transmitted or redistributed in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, or stored in a retrieval system for any purpose other than noted above (including sales), without prior written permission of Canada Revenue Agency, Ottawa, Ontario K1A 0L5
© Her Majesty the Queen in Right of Canada, 1988
Tous droits réservés. Il est permis de copier sous forme électronique ou d'imprimer pour un usage interne seulement. Toutefois, il est interdit de reproduire, de modifier, de transmettre ou de redistributer de l'information, sous quelque forme ou par quelque moyen que ce soit, de facon électronique, méchanique, photocopies ou autre, ou par stockage dans des systèmes d'extraction ou pour tout usage autre que ceux susmentionnés (incluant pour fin commerciale), sans l'autorisation écrite préalable de l'Agence du revenu du Canada, Ottawa, Ontario K1A 0L5.
© Sa Majesté la Reine du Chef du Canada, 1988
Email this Content