2 February 2017 Quebec CPA Individual Taxation Roundtable Q. 1.8, 2016-0674851C6 F - HBTC - Acquisition by way of gift
An individual received a gift of a home from the individual’s parents. Would this acquisition by gift rather than purchase preclude deduction of the first-time home buyer’s credit (HBTC). CRA responded:
The CRA is of the view that the acquisition of a qualifying home by way of gift is a valid acquisition for the purposes of the HBTC. Consequently, subject to compliance with all the other conditions of section 118.05, the mere fact of acquiring a home by way of gift does not in itself prevent an individual from applying for the HBTC.
In the 1st situation, partnership between two spouses acquired a farm including a residence after January 27, 2009. Would either spouse be able to claim the HBTC or share it between them?
In the 2nd situation, a partnership between two spouses and their adult son and which owned a residence which was exclusively occupied by the two spouses, build a second residence after January 27, 2009 which was exclusively occupied by their son as his first residence. Can he claim the HBTC?
[W]e accept, under an administrative position applicable for purposes of the HBTC (similar to those taken for purposes of calculating the gain on the disposition of a principal residence and the Home Renovation Tax Credit), that a member of a partnership may be able to claim the HBTC in certain situations even though the member is not the legal purchaser of the home.
By virtue of this administrative position, a partner could be considered the acquiror of the home for purposes of the HBTC and thus claim the HBTC if the member of the partnership is an individual, the home qualifies as a principal residence as defined in section 54 to the individual, and all of the conditions for the HBTC are otherwise satisfied as if the partner had personally acquired the home. ….
[This] position could apply in the two hypothetical situations … .
11 October 2019 APFF Financial Strategies and Instruments Roundtable Q. 2, 2019-0811881C6 F - HBP/HBTC - Death of a spouse
Monsieur had predeceased Madame, aged 58, three months before her purchase of a condo in July 2019, using funds withdrawn from her RRSP. Monsieur had been the sole owner of their home until his death, with the home then held by the estate before its sale. Is Madam eligible for the first-time home buyer’s credit (FHBTC)? CRA stated:
[S]ince Madame did not have a spouse or common-law partner at the time of acquisition of the home, the condition in subparagraph (a)(iii) of the definition "qualifying home" in subsection 118.05(1) is not applicable. Furthermore, since she was not the owner-occupant of a home during the period starting on January 1, 2015 and ending the day before the acquisition, we are of the view that the condition in subparagraph (a)(ii) of the definition of "qualifying home" in subsection 118.05(1) is respected. Thus, the home acquired in July 2019 could, if all the other conditions … are otherwise satisfied, qualify as a "qualifying home" for the purposes of the FHBTC.
|Locations of other summaries||Wordcount|
|Tax Topics - Income Tax Act - Section 146.01 - Subsection 146.01(1) - Regular Eligible Amount - Paragraph (f)||widow who had resided in the home of her deceased husband could access the HBP program to purchase a condo or acquire his home from estate||221|
Can the first-time home buyers' tax credit ("HBTC") be claimed where the taxpayer buys a house for the sum of a dollar? CRA responded:
[T]he acquisition of a qualifying home for the sum of one dollar is an acquisition for the purposes of the HBTC. Consequently, subject to satisfying all the other conditions of section 118.05, the mere fact of acquiring a home for a dollar does not by itself prevent an individual from claiming the HBTC.