SUBJECT: Qualifying Home for HBTC
Principal Issues: Does a home where construction started in May 2008 and an occupancy permit is issued in July 2009, fulfill the definition of a qualifying home for the HBTC?
Position: Yes
Reasons: Legislation
XXXXXXXXXX
2010-036284
George A. Robertson, CMA
September 15, 2010Dear XXXXXXXXXX :
Re: First-Time Home Buyers' Tax Credit (HBTC)
This is in response to your electronic letter of April 7, 2010 where you requested our views regarding your newly constructed home as a qualifying for the HBTC.
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 Canada Revenue Agency ("CRA") publications can be accessed on the Internet at http://www.cra-arc.gc.ca/formspubs/menu-e.html. Where the particular transactions are completed, the inquiry should be addressed to the relevant Tax Services Office.
Section 118.05 of the Income Tax Act (Act) provides first-time home buyers with a $750 non-refundable tax credit in respect of a "qualifying home" acquired after January 27, 2009. Pursuant to subsection 118.05(3) of the Act, an individual may claim the HBTC for a taxation year in which a "qualifying home" is acquired.
Pursuant to subsection 118.05(2) of the Act, an individual is considered to have acquired a qualifying home only if the individual's interests (or for civil law, right) in it is registered in accordance with the land registration system or other similar system applicable where it is located.
For the purposes of the HBTC, a qualifying home is a housing unit located in Canada as outlined in paragraph 118.05(1)(a) and subsection 146.01 of the Act. Although a definition of a housing unit is not contained in the Act, a house with an occupancy permit issued by the local building department would qualify as a housing unit.
Provided all other conditions are met, your house for which construction started in May 2008 with an occupancy permit issued in July XXXXXXXXXX , 2009, would be eligible as a qualifying home for the HBTC.
We trust that the above comments address your concerns. You can find more information on the HBTC on CRA's web site at www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html
Yours truly,
Sharmini Ratnasingham
Assistant Director
Ontario Corporate Tax Division
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch