Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.
Principal Issues:
The detrimental effect certain provisions of the Income Tax Act may have on the willingness of landlords to maintain or rejuvenate inner-city housing.
Position:
Requires legislative change.
Reasons:
See below
XXXXXXXXXX
Dear Colleague:
Thank you for your letter of May 31, 2002, with which you enclosed correspondence from your constituent, XXXXXXXXXX, concerning the detrimental effect certain provisions of the Income Tax Act may have on the willingness of landlords to maintain or rejuvenate inner-city housing.
The concern raised by XXXXXXXXXX with respect to the increase in the capital cost allowance rate for inner-city housing rental properties from 4 per cent to 10 per cent is a matter of tax policy, which is the responsibility of the Department of Finance. The role of the Canada Customs and Revenue Agency (CCRA) is to administer and enforce the Act as passed by Parliament. You indicate that you have written to the Honourable John Manley, Minister of Finance, on XXXXXXXXXX behalf. I suggest that she communicate with officials of that department on this issue.
The courts have established the guidelines the CCRA uses to determine whether expenditures for a rental property are for capital improvements or repairs. These guidelines are published in the interpretation bulletin to which XXXXXXXXXX refers, IT-128R, Capital Cost Allowance - Depreciable Property. The CCRA has a mandate to treat all taxpayers equally, and is committed to applying these guidelines consistently and fairly.
I trust that the above information will assist you in responding to XXXXXXXXXX .
Sincerely,
Elinor Caplan
c.c.: Minister's Office
Political Assistant
Randy Hewlett
957-8973
June 24, 2002
2002-014644