| 19(1) | 922026 | |
| R.B. Day | ||
| (613) 957-2136 |
August 7, 1992
Dear 19(1)
Re: Mortgage Subsidy Plan
We are writing in reply to your letter of March 12, 1992, which was forwarded to us with your letter of June 26, 1992, wherein you requested our opinion as to whether or not your mortgage loan would be considered to be a "Home Purchase Loan" as defined in the Income Tax Act (the Act).
As we understand it, 24(1) 24(1)
Our Comments
A Home Purchase Loan, as defined in the Act, includes a loan that is used to acquire or repay a loan or debt that had been received or incurred to acquire a dwelling for the habitation of the individual and the loan was received by the individual by virtue of the office or employment. In determining whether or not a subsidy paid on such a loan is received by the individual "by virtue of an office or employment" (such that the special benefit provisions for Home Purchase Loans applies) or the subsidy gives rise to an ordinary taxable benefit, depends on the degree of involvement of the employer in the process of negotiating and approving the loan. We are enclosing for your information a copy of our Interpretation Bulletin IT-421R, dated July 9, 1984, entitled "Benefits to Individuals, Corporations and Shareholders from Loans or Debt", which discusses this matter and others, in greater detail.
From our review of the circumstances set out in your letter and the Plan document, it would appear that your loan would qualify as a Home Purchase Loan, for purposes of the Act.
We trust our comments will be of assistance to you.
Yours truly,
P.D. Fuocofor DirectorBusiness and General DivisionRulings DirectorateLegislative and Intergovernmental Affairs Branch
c.c. Toronto District Office