The BC Secondary Suite Incentive Program (“BC SSIP”) assists qualifying homeowners to create a new secondary suite or accessory dwelling unit (a “Secondary Suite”) on the property of their principal residence (“Property”), by providing a forgivable loan in the amount of 50% of the Secondary Suite’s construction costs, subject to a maximum loan amount. It must be rented at no more than a rent affordability limit for at least five years to a tenant who is not an immediate family member, and the loan amount will be forgiven over five years if all of the program requirements are satisfied.
After referring to the Stewart test, CRA stated that these circumstances, “could support a determination that a Homeowner’s rental activities under the Program are commercial in nature (that is, not a personal endeavour) and that they are undertaking the activity with an intention to profit, thereby constituting a source of income,” so that any resulting loss could be claimed. The source would be property income rather than business income.