18 June 2010 External T.I. 2009-0335901E5 - Home Buyers' Plan - qualified home

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 considered a qualifying property for purposes of the Home Buyers' Plan?

Position: Yes. A mobile home on leased land is considered a qualifying property for purposes of the Home Buyers' Plan assuming all other conditions are met.

Reasons: Based on the legislation and CRA publications, there is no requirement that the land on which a mobile trailer is situation be owned.

XXXXXXXXXX
									2009-033590
									K. Hooey
June 18, 2010

Dear XXXXXXXXXX :

Re: Home Buyers' Plan, First-Time Home Buyer

This is in reply to your August 10, 2009 email requesting our views on whether an individual would be considered a first-time home buyer under the Home Buyers' Plan ("HBP") and be eligible to participate in the HBP. You describe a situation where the individual and his spouse have inhabited a mobile home as their principal place of residence for several years. The mobile home is owned by the individual's spouse and is situated on a leased site in a Canadian trailer park.

Our comments

Written confirmation of the tax implications inherent in particular transactions may only be provided by this Directorate where the transactions are proposed and are the subject matter of an advance income tax ruling submitted in the manner set out in Information Circular 70-6R5, "Advance Income Tax Rulings", dated May 17, 2002. This Information Circular and other CRA publications can be accessed on the internet at http://www.cra-arc.gc.ca. Although we cannot comment on your specific situation, we are prepared to provide the following general comments, which may be of assistance.

Under the HBP provisions in section 146.01 of the Income Tax Act (the "Act"), an individual can withdraw funds from the individual's RRSP to buy or build a qualifying home. The CRA's general views regarding the HBP are expressed in Guide RC4135, Home Buyers' Plan. In order to participate in the HBP, the individual has to meet several conditions, as described in that guide. Where these conditions are met, the amount withdrawn is not included in the individual's income. Whether a specific individual would meet all of these conditions is a question of fact.

One of the conditions is that the individual qualifies as a first-time home buyer. An individual is not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the RRSP withdrawal and ending 31 days before the withdrawal, the individual had an owner-occupied home or the individual's spouse or common-law partner had an owner-occupied home that was inhabited by the individual. An individual will be considered to have an owner-occupied home where the individual owns (jointly or otherwise) a housing unit and the housing unit is inhabited by the individual as the individual's principal place of residence at that time. A mobile home is considered a housing unit for this purpose.

Based on the information you have provided, the individual would be ineligible to participate in the HBP since the individual's spouse owned a home that the individual occupied as his principal place of residence during the four-year period before the time of the proposed RRSP withdrawal. Accordingly the individual would not be considered a first-time home buyer. The fact that the mobile home was situated on leased land is not relevant to this determination.

We trust the above comments are of assistance.

Yours truly,

Mary Pat Baldwin, CA
for Director
Financial Sector and Exempt Entities Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch