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.
Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
What portion of land can be considered a principal residence.
Position:
No position given.
Reasons:
A question of fact. General comments were made to help the taxpayer come to her own conclusion.
973009
XXXXXXXXXX J.E. Grisé
February 23, 1998
Dear XXXXXXXXXX:
Re: Principal Residence
This is in reply to your letter of October 29, 1997 concerning your request for an advance income tax ruling on the possible disposition of a portion of the 1.25 acre land subjacent and adjacent to the housing unit that has served as your primary residence since 1974.
The question as to whether or not a property is an individual's principal residence is one of fact on which we do not provide an advance income tax ruling. However, we will provide you with some general comments which should be helpful in your determining the portion of your land that qualifies as your principal residence for income tax purposes.
The Department's position, as stated in paragraphs 20 to 22 of the attached interpretation Bulletin IT-120R4, Principal Residence, is that 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 a principal residence. No proof of such use and enjoyment is normally required in respect of 1/2 hectare (1.24 acres) of land or less. Where the total area of land exceeds 1/2 hectare, the excess is not considered to be part of the principal residence unless it can be demonstrated that it was necessary for the use and enjoyment of the residence.
A factor which may be relevant in determining whether land in excess of 1/2 hectare is necessary for the use and enjoyment of a housing unit as a residence are subdivision restrictions. In this respect, please note paragraph 20 of IT-120R4 which states, in part: "A legally imposed minimum lot size, for residential use, exceeding 1/2 hectare that was in effect on the date the property was acquired by the taxpayer, is generally considered to be the minimum amount of land necessary for the use and enjoyment of the housing unit as a residence throughout the period that the property is continuously owned by the taxpayer after that acquisition date."
We hope our comments are of assistance.
Yours truly,
John F. Oulton
for Director
Business and Publications Division
Income Tax Rulings and
Interpretations Directorate
Policy and Legislation Branch
Attachment
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