3 April 1992 T.I. (Tax Window, No. 18, p. 23, ¶1865)
The purchase by an individual of the interest of a former common-law spouse in a jointly-owned home would qualify as the acquisition of a "qualifying home".
Subsection 146.01(1) - Definitions
In confirming that a judgment declaring a sale of a home to be void would not affect the operation of the HBP rules where the home in question was acquired under an HBP, CRA stated:
Eligibility for withdrawing funds from an RRSP under the HBP … is not affected by the occurrence of subsequent events. As a result, once all the conditions to participate in the HBP are met and a withdrawal has been made from an RRSP, it is not possible to cancel participation in the HBP. … In addition, subject to special repayment situations, the repayment period for withdrawals under this HBP remains unchanged by the voiding of the sale.
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|Tax Topics - General Concepts - Effective Date||subsequent court-ordered voiding of home purchase did not retroactively void satisfaction of the HBP conditions at home purchase time||87|
29 September 1994 Memorandum (C.T.O. "First-time Home buyer under Home Buyers' Plan")
The exclusion in s. 146.01(1)(d.1)(ii) limits the exclusion to individuals to have spouses at the time of the withdrawal. Accordingly, if at the time of the withdrawal the taxpayer was divorced from his spouse, the previous ownership by the spouse of a principal residence will not result in disqualification.
It is also considered that the joint ownership of a home by a taxpayer with her spouse after January 1, 1990 will not result in disqualification if subsequent to that time she was separated from her spouse and did not inhabit the house, as referred to in s. 146.01(2)(a.1).
Regular Eligible Amount
Monsieur had predeceased Madame, aged 58, three months before her purchase of a condo in July 2019, using funds withdrawn from her RRSP.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 home buyer plan (HBP) treatment?
CRA found that, given that Monsieur was no longer considered to be her spouse at the time of her withdrawal from her RRSP, she was eligible for HBP treatment provided the other conditions were satisfied, stating:
[S]ince Madame does not have a spouse or common-law partner at the time of the withdrawal of an amount from her RRSP, being in July 2019, the condition set out in paragraph (f) of the definition "regular eligible amount" in subsection 146.01(1) would not be applicable. Furthermore, since she was not the owner-occupant of a home during the period beginning on January 1, 2015 and ending 31 days before the date of the withdrawal in July 2019, we are of the view that the condition in paragraph (e) of the definition "regular eligible amount" in subsection 146.01(1) is satisfied.
Madame also would have been entitled under the HBP rules to use her RRSP funds on an acquisition of the home of her deceased husband from the estate, provided that there was an agreement in writing for its acquisition.
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|Tax Topics - Income Tax Act - Section 118.05 - Subsection 118.05(1) - Qualifying Home - Paragraph (a)||widow who had resided in the home of her deceased husband could access the first-time home buyer’s credit||163|
Regular Eligible Amount
An individual and other persons inherited a house and, when the others accepted the inheritance, they made a gift to the individual of their respective shares in the house. You stated that the deceased had not left a will. Can the individual benefit from the home buyer plan (“HBP”) rules based on having entered into a written agreement to acquire or construct a housing unit? CRA responded:
[W]here one or more written agreements provide for the acquisition of a house by way of legacy and gift, the CRA is generally of the view that it is a valid acquisition for the purposes of the definition of "regular eligible amount ". Consequently, provided that the other conditions…are satisfied, acquiring a qualifying home in the circumstances described above would not preclude… from participating in the HBP.
Can an individual who had already owned a home in the U.S withdraw an amount from an RRSP under the home buyers’ program? After stating that “where an individual owning a home has lived in it as the principal place of residence, we consider that the individual owned the home as an owner-occupant” and referring to the discussion in Income Technical News No. 31 of the meaning of “principal place of residence,” CRA stated:
The fact that the home was located in the United States does not alter this opinion.
After referencing the vacant possession test, CRA stated (TaxInterpretations translation):
[W]hen the individual receives the keys to the unit, and the time at which it is agreed with the vendor that the individual can move in, are key factors.
5 October 2018 APFF Financial Strategies and Instruments Roundtable Q. 8, 2018-0761541C6 F - HBP withdrawals straddling two calendar years
At the 2010 APFF Financial Strategies and Instruments Roundtable, a Finance representative indicated that one of the factors which CRA could take into account in determining whether an HBP withdrawal made after January of a year was to be deemed under s. 146.01(2)(d) to have been received at the end of the preceding year, was whether the RRSP balance at that year end was sufficiently elevated to support that withdrawal. If often occurs that a purchase that is made in one year does not close until after January of the following year.
If the RRSP balance on December 31, 2017 is sufficient to cover the RRSP withdrawal subsequent to January of 2018, will CRA automatically apply its discretion under s. 146.01(2)(d) such that the withdrawal is deemed to have been made at the end of 2017; and which other factors if any does CRA take into account in exercising that discretion? CRA responded:
The mere fact that, in the situation described, the RRSP balance at December 31, 2017 is sufficient to cover the RRSP withdrawal made in 2018, at a time that is after January 2018, would not, in itself, be sufficient for that Ministerial discretion to be automatically applied, since only a full examination of the facts and circumstances of a particular situation can permit the exercise of that discretion.
In exercising her discretion, the Minister may consider, in addition to the RRSP balance at December 31, 2017, the dates on which the amounts required for withdrawal were contributed and the reasons for the withdrawals being made over a period that straddled two calendar years. However, this is not an exhaustive list. …
HBP participants who withdraw over more than one year will generally be contacted by the CRA to confirm details of their participation.