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: Whether the individual is considered a first-time home buyer when she lived in a home owned solely by her ex-husband.
Position: It is a question of fact, but likely yes.
Reasons: The taxpayer appears to meet the requirements of paragraphs (e) and (f) of the definition of Regular Eligible Amount in subsection 146.01(1).
XXXXXXXXXX
2014-053958
Eric Wirag, CPA, CMA
(613) 957-2090
August 26, 2014
Dear XXXXXXXXXX,
We are replying to your letter of July 10, 2014, in which you asked whether you would be considered a first-time home buyer for purposes of participating in the Home Buyers' Plan. You state in your letter that you have been separated from your ex-husband since XXXXXXXXXX, but you continued to live in the family home that was owned solely by your ex-husband until XXXXXXXXXX. You also state that your ex-husband did not live with you in the home after your separation. You refer to your spouse as your ex-husband but you also indicate that you are separated. It is not clear if you are separated from your husband, or divorced.
Our comments:
This technical interpretation provides general comments about the provisions of the Income Tax Act (the "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 70-6R5, Advance Income Tax Rulings.
In order to participate in the Home Buyers' Plan, an individual has to satisfy several conditions, which are explained in the guide RC4135, Home Buyers' Plan (HBP) available on Canada Revenue Agency website. One of the conditions required for participation in the Home Buyers Plan is that the individual qualify as a first-time home buyer. The requirements for being considered a first-time home buyer are found in paragraphs (e) and (f) of the definition of "regular eligible amount" in subsection 146.01(1) of the Act.
An individual is considered a first-time home buyer if during the period beginning January 1 of the fourth year before the year of the Home Buyers' Plan withdrawal and ending 31 days before the date of the withdrawal:
- The individual did not have an owner-occupied home at any time; and
- If the individual had a spouse or common-law partner at the time of the withdrawal, the spouse or common-law partner did not have an owner-occupied home that the individual lived in during the marriage or common-law partnership.
For the purpose of the Home Buyers' Plan, an "owner-occupied" home is a home that an individual owns (solely, jointly with another person or otherwise) that is inhabited as the individual's principal place of residence. A home that an individual owns, but does not live in as his or her principal place of residence, is not an "owner-occupied" home of that individual for the purpose of the Home Buyers' Plan.
For participation in the Home Buyer's Plan in 2014, the relevant period to determine if an individual is considered a first-time home buyer begins January 1, 2010 and ends 31 days before the Home Buyers' Plan withdrawal in 2014. An individual who is not married or in a common-law partnership must not have had an owner-occupied home during the relevant period to be a first-time home buyer. An individual who is married or in a common-law partnership at the time of the withdrawal, and lived in a home owned by the spouse or common-law partner, may still qualify as a first-time home buyer if the home was not an owner-occupied home of the spouse or common-law partner at any time during the relevant period.
The determination of whether an individual is considered to be a first-time home buyer is a question of fact. If you meet the requirements for the entire period described, you would likely be considered a first-time home buyer for purposes of the Home Buyers' Plan.
We trust our comments will be of assistance.
Yours truly,
Pamela Burnley, CPA, CA
Tax Credits and Ministerial Issues
Business and Employment Division
Income Tax Rulings Directorate
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