31 October 1989 External T.I. 58365 F - Principal Residence — Meaning of "Ordinarily Inhabited"

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.

October 31, 1989

Dear Sirs:

Re:  Meaning of "ordinarily inhabited" as used in Paragraph 54(g) of the Income Tax Act (the "Act")

This is in reply to your letter dated July 12, 1989 (File No. 40053/340) wherein you have asked whether a taxpayer could be considered to have "ordinarily inhabited" a particular housing unit, within the meaning of that expression found in paragraph 54(g) of the Act, in any of the years from 1972 to the present in the particular circumstances set forth in your correspondence.

Whether a taxpayer has "ordinarily inhabited" a residence is a finding of fact based on all facts and circumstances surrounding each case.  Such a determination can best be made by your local district taxation office (located at 36 Adelaide Street East, Toronto).  We do not feel that we are in a position to offer you a definitive response.  However, we do offer the following general comments which may be of assistance to you.

The expression "ordinarily inhabited" is not defined in the Act.  As discussed in paragraph 9 of interpretation bulletin IT-120R3, where a residence has been occupied by such a person for only a short period of time during a taxation year (such as a seasonal residence), it is the Department's view that the taxpayer "ordinarily inhabited" that residence in the year provided that the principal reason for owning the property was not for the purpose of gaining or producing income therefrom.

The Shorter Oxford English Dictionary defines "inhabit" to dwell in, occupy as an abode.  The New Webster Encyclopedia Dictionary of the English language also defines "inhabit": to live or dwell in; to occupy as a place of settled residence.  The word inhabitant is defined as: one who inhabits; one who dwells or resides permanently in a place, as distinguished from an occasional visitor.

The facts particular to your case would appear to indicate that the taxpayer "ordinarily resided" in the residence in some of the years in question, particularly in the latter years (1977 and onward) when he transferred his ordinary or everyday possessions into the residence for his use.  Subparagraph 54(g) of the Act requires a residence to be ordinarily inhabited "in the year".  Thus, a determination must be made on a year to year basis in deciding whether a residence was ordinarily inhabited in the year.  Circumstances may also support the position that the residence was "ordinarily inhabited" in the earlier years (1972 - 1976) but as we are not cognizant of all the relevant facts particular to your case, we are unable to offer an opinion on a year to year basis.

We regret that we cannot be of more assistance to you.

Yours truly,

P.D. Fuoco for DirectorBusiness and General DivisionSpecialty Rulings DirectorateLegislative and Intergovernmental Affairs Branch