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: Is a mobile home on leased land a qualifying home for HBTC?
Position: It depends.
Reasons: Subsection 118.05(2) of the Act requires the individual's interests (or for civil law, right) in the qualifying home to be registered in accordance with the land registration system or other similar system applicable where it is located, for the property to be considered as a qualifying home for purposes of claiming HBTC.
XXXXXXXXXX 2024-102171
Fanta Yao
May 2, 2025
Re: First Time Home Buyers Credit for a Mobile Home situated on Leased Land
This letter is in response to your email of June 2, 2024 regarding whether the purchase of a mobile home that is situated on leased land can be considered a qualifying home for the purposes of claiming the First Time Home Buyers’ Tax Credit (HBTC) under section 118.05 of the Income Tax Act (the Act) . You indicated that the mobile home was located on leased land in the province of XXXXXXXXXX, with a monthly rent paid for the use of the land, and it was not registered in the land registration system in XXXXXXXXXX. We apologize for the delay in our response.
Our Comments:
This technical interpretation provides general comments about the provisions of 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 HBTC, under section 118.05 of the Act, provides first-time home buyers with a $1,500 non-refundable tax credit in respect of a qualifying home acquired after 2021. For a qualifying home acquired after January 27, 2009 and prior to 2022, the credit available was $750. Pursuant to subsection 118.05(3) of the Act, an individual may claim the HBTC for a taxation year in which a qualifying home is acquired.
For the purpose of the HBTC, a “qualifying home” includes any housing unit located in Canada or a share in a cooperative housing corporation that entitles the taxpayer to possess and have an equity interest in a housing unit located in Canada. Where the home is acquired by the individual or by the individual's spouse or common-law partner, the individual must intend to inhabit the home as a principal place of residence not later than one year after its acquisition. As well, the individual must be a first-time home buyer. An individual is considered to be a first-time home buyer for this purpose if, during the four calendar years preceding the year of acquisition, neither the individual, nor the individual's spouse or common-law partner, owned a home that was occupied, generally, by the individual or the individual's spouse or common-law partner.
Particularly relevant to the current situation, subsection 118.05(2) of the Act further specifies that an individual is considered to have acquired a qualifying home only if the individual's interests (or for civil law, right) in it is registered in accordance with the land registration system or other similar system applicable where it is located.
It is our understanding that in XXXXXXXXXX, land is registered under the XXXXXXXXXX and is maintained by the XXXXXXXXXX as the land registration system. As you have confirmed that the mobile home in question is not registered with the XXXXXXXXXX land registration system, it is not likely to be considered as a qualifying home pursuant to subsection 118.05(2) of the Act.
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
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