28 January 1993 Income Tax Severed Letter 9237595 - Home Buyers Plan

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.

5-923759
XXXXXXXXXX Robert Gagnon
(613) 957-8953
January 28, 1993

Dear Sir:

Re: Home Buyers' Plan

This is in reply to your letter of December 2, 1992 wherein you requested an advance ruling concerning the Home Buyers' Plan ("HBP").

The Department does not provide rulings on proposals that are not yet law. We cannot provide the requested ruling as the rules concerning the HBP have not yet been sanctioned by Parliament. However, the following general comments may be of assistance to you. Please note that while our comments reflect the HBP as presently proposed, they may or may not reflect the law as it is finally sanctioned.

The HBP allows taxpayers to use funds from their registered retirement saving plan ("RRSP") to assist them in purchasing a qualifying home. When the following conditions are met, you do not have to include the withdrawn funds from your RRSP in your income and the issuer will not withhold tax:

• 1. to withdraw funds from a RRSP under the HBP, you must complete form T1036 (in which you set out the location of a qualifying home that you have begun, or intend no later than one year after its acquisition to begin using as a principal place of residence) and file it with your RRSP issuer (forms T1036 are available at Revenue Canada District Offices);
• 2. the funds are withdrawn after February 25, 1992 and before March 2, 1994;
• 3. you are a resident of Canada from the time you withdraw the funds to the time you acquire a qualifying home, unless you acquire the qualifying home before you make any withdrawals. Where you acquire the qualifying home before you make any withdrawals, you must be resident of Canada at the time funds are withdrawn;
• 4. you entered into an agreement in writing for the acquisition of a qualifying home or with respect to its construction, before the time funds are withdrawn;
• 5. if funds are withdrawn before March 2, 1993, you generally must (an exception apply in certain circumstances) acquire the qualifying home (or a replacement property) after February 25, 1992 and before October 1, 1993. If funds are withdrawn after March 1, 1993 and before March 2, 1994, a qualifying home (or a replacement property) generally must be acquired before October 1, 1994;
• 6. neither you nor your spouse acquired the qualifying home more than 30 days before funds are withdrawn under the HBP;
• 7. the qualifying home is intended to be your principal place of residence within one year after you acquire it;
• 8. the total amounts withdrawn under the HBP does not exceed $20,000.

A qualifying home can be an existing home or one being constructed. A condominium unit is a qualifying home if it is located in Canada.

For the purposes of the HBP, where a taxpayer agrees to acquire a condominium unit, the taxpayer shall be deemed to have acquired it on the day he is entitled to take possession of it. For instance, if you are entitled to take possession of your condominium unit on July 1, 1993, you are deemed to have acquired the unit at that date.

The foregoing comments are not rulings and, in accordance with the guidelines set out in Information Circular 70-6R2 dated September 28, 1990, are not binding on the Department.

We trust our comments will be of assistance to you.

Yours truly,

for Director
Financial Industries Division
Rulings Directorate