Spouses purchased a home in 2006 which they used as their primary residence until 2015, when they moved out and started renting it out. Although both are on title, the husband provided all the purchase funds and has reported all the rental income. They wish to file a s. 45(2) late election respecting the change in use. Regarding whether both were required to make the election, the Directorate stated:
[T]he term “beneficial ownership” is used to describe the type of ownership of a property by a person who is entitled to the use and benefit of the property whether or not that person has concurrent legal ownership. A person who has beneficial ownership but not legal ownership can enforce their ownership rights against the holder of legal title.
… The fact that the wife did not contribute financially towards the purchase of the Home is not necessarily indicative of whether or not she holds a beneficial interest in the property. There is generally a presumption that the holder of legal title of a property is also the beneficial owner of the property, unless the facts support otherwise. …
Generally speaking, beneficial ownership represents ownership of a property under the Act. As such … the taxpayer referred to [in s. 45] would typically be the beneficial owner of the property, whether such ownership is jointly held with another person or otherwise. Therefore, if both spouses are considered to have beneficial ownership … they would both be required to file the election … .
The Directorate went on to note:
[F]iling the election in respect of a housing unit does not require a taxpayer to designate that housing unit as their principal residence for any particular taxation year.