Words and Phrases - "housing unit"
8 November 2005 External T.I. 2005-0148091E5 F - Résidence principale-deux unités de condominium
A couple purchased a condo beneath the one they had been occupying as their home and did work to connect the two units by interior staircase. Before finding that the two units did not constitute a single housing unit for purposes of the principal residence exemption, CRA stated:
[I]t is clear that the two units must be sufficiently integrated - and to do so, have undergone major work - for the use of and access to one of the units to be a condition of the full enjoyment of the other unit. Thus, if each unit can be ordinarily inhabited without access being provided to the other unit, (for example, each unit has a kitchen and a bathroom and both have separate access) it will be difficult to consider the two units to be a single housing unit within the meaning of section 54.
On the other hand, if one unit has all the bedrooms and the other unit consists primarily of the kitchen and bathrooms and they are truly used as one unit, the CRA may be more likely to conclude that there is a single unit for purposes of the definition of "principal residence" … .
Although units A and B are connected by an interior staircase, it appears that the layout of the two units has not been altered significantly enough to be considered a single unit. Furthermore, the fact that the two units have retained their respective civic addresses and continue to be subject to separate property tax and electricity accounts seems to support the validity of our position.
21 January 2016 Ordre des CPA du Québec Personal Taxation Roundtable Q. 9, 2016-0625141C6 F - Principal residence - duplex
An individual purchases a duplex to support and provide care to an elderly parent, and renovates it so a door now provides interior access between the two units. Meals are mostly are prepared and taken (with the parent) in the living space of the owner and the owner’s family. On resale of the property, would there be a disposition of one or two housing units? What if the duplex belonged to the parent? CRA responded (TI translation):
[T]wo units of a duplex will be considered as together constituting a single housing unit to the extent that they are sufficiently integrated so that it is not possible to live normally in the living areas of one of the units without also having access to the other unit in order to use its facilities. This will be the case, for example, if one of the units contains all the bedrooms while the other unit contains the kitchen and the bathroom, and the two units are jointly used for residential purposes as a single unit. …
[T]he fact that inner door access is installed between the two units or that meals are prepared and taken the vast majority of the time in one of the two units does not appear to be sufficient for the two units to be considered as a single housing unit for the purposes of the I.T.A. The fact that the two units each have a bedroom, a kitchen and a bathroom and separate street addresses and their own electric meter are elements that tend to indicate that they instead are two separate housing units. On this basis, only the housing unit ordinarily inhabited by the individual qualifies as a principal residence. …
Our comments would be the same if the property belonged to the parent, except that in this case, one or other of the housing units could qualify as the principal residence of the parent.
Boulet v. The Queen, 2010 DTC 1015 [at at 2602], 2009 TCC 261
A basement apartment in the house inhabited by the taxpayer, which had a kitchenette, bedroom and bathroom, was accessible only through an exterior door and had its own municipal address, was not part of the taxpayer's principal residence since the evidence produced showed that the taxpayer did not ordinarily inhabit the basement during the year in which the house was sold.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - General Concepts - Fair Market Value - Land | binding NAL agreement suppressed land's FMV | 217 |
| Tax Topics - Income Tax Act - Section 15 - Subsection 15(1) | benefit conferred when shareholder receives unconditional right thereto, rather than when such right subsequently exercised | 356 |