14 April 2010 External T.I. 2010-0356901E5 F - RAP- Rétroactivité
Principal Issues: [TaxInterpretations translation] For the purposes of paragraph (e) of the definition of "regular eligible amount" in subsection 146.01, can a taxpayer be considered not to have owned a home where, under the C.C.Q., a sale is deemed never to have existed?
Position: Yes
Reasons: For the purposes of the HBP, we accept that a taxpayer has not owned a home where the agreement of purchase and sale was cancelled before the time of withdrawal.
2010-035690
XXXXXXXXXX Catherine Ayotte,
Notary, M. Fisc.
April 14, 2010
Dear Madam, Sir,
Subject: Home Buyer's Plan ("HBP")
This is further to your letter of February 5, 2010, asking us to confirm that you are eligible for the HBP for the purchase of your home.
Please note that unless otherwise indicated, all legislative references herein are to the provisions of the Income Tax Act (the "Act").
As explained in Information Circular 70-6R5, it is not the Directorate's practice to comment on proposed transactions involving specific taxpayers otherwise than in the form of an advance income tax ruling. If your situation relates to a completed transaction, you should forward all relevant facts and documents to the appropriate Tax Services Office for its views. However, we are prepared to provide the following general comments that may be helpful to you.
In order to be eligible for the HBP, several conditions must be satisfied. For more information, see the section “What are the conditions for participating in the HBP?” in the guide RC4135 Home Buyers' Plan, which is available on the Canada Revenue Agency's Web site at http://www.cra-arc.gc.ca/E/pub/tg/rc4135/READ-ME.html .
Among these conditions, you have to be considered a first-time home buyer. To qualify, you or your spouse or common-law partner must not have owned a home that you occupied as your principal place of residence during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the date of the withdrawal.
We are of the view that the nullification of the sale of an immovable under Article 1422 of the Civil Code of Quebec means that the purchaser of the immovable is not considered to have been the owner for the purposes of the HBP.
To be considered a first-time home buyer for 2010, you must not have owned a home that you occupied as your principal place of residence since January 1, 2006. Based on the facts submitted in your request, you indicated that you owned a home that you occupied as your principal place of residence until May 2006. Therefore, you would not be eligible to participate in the HBP in 2010.
We hope that our comments will be of assistance.
Best regards,
Manager
Financial Sector and Exempt Entities Section
Income Tax Rulings Directorate
Legislative Policy and Regulatory Affairs Branch.