16 February 2001 External T.I. 2001-0067015 - HBP, owner-occupied, corporation

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: Can a person participate in the Home Buyers Plan if they reside in a home that they have rented from their wholly-owned corporation for the past five years?

Position: Yes.

Reasons: The definition of regular eligible amount in the Act refers to an owner-occupied home. The home is owned by a corporation so it would not be an owner-occupied home.

XXXXXXXXXX 		2001-006701
M. P. Sarazin, CA
February 16, 2001

Dear XXXXXXXXXX:

Re: Home Buyers' Plan and Corporate-Owned Home

This is in reply to your facsimile of January 23, 2001, requesting a technical interpretation as to whether a home that is rented from an individual's corporation would constitute an owner-occupied home in respect of the particular individual for purposes of the definition of regular eligible amount in subsection 146.01(1) of the Income Tax Act (the "Act").

Comments

Confirmation of the tax consequences associated with completed transactions are provided by the relevant tax services office. Opinions concerning proposed transactions involving specific taxpayers will only be provided in response to a request for an advance income tax ruling. For more information concerning advance tax rulings, please refer to Information Circular 70-6R4 dated January 29, 2001, issued by the Canada Customs and Revenue Agency (the "Agency"). Copies of information circulars, interpretation bulletins and other publications are available from your local tax services office or on the Internet at the following site - http://www.ccra-adrc.gc.ca/formspubs/menu-e.html. However, we can provide you with the following general comments.

You will find the Agency's general views regarding the Home Buyers' Plan ("HBP") in the Guide titled "Home Buyers' Plan (HBP)" (RC4135). In order to participate in the HBP, an individual has to satisfy several conditions which are described very clearly in the chart found on page 5 of the Guide.

One of the conditions is that the person qualifies as a first-time home buyer. With respect to participation in 2001, a person is not considered a first-time home buyer if, at any time during the period beginning January 1, 1997 and ending 31 days before the HBP withdrawal in 2001, the individual or the individual's spouse had an owner-occupied home. 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. However, where an individual rents a home from a corporation which is not a cooperative housing corporation, the individual owns some or all of the shares of the corporation and the home is owned by the corporation, without evidence to the contrary, the individual should not be considered as owning the home during the period that it is owned by the corporation for the purposes of determining whether this condition is satisfied.

We trust the above comments will be of assistance to you.

Yours truly,

Roberta Albert, CA
for Director
Financial Industries Division
Income Tax Rulings Directorate