Aco, with a business of renting out properties, had been renting out one of its housing units for the five years prior to January 2023. After noting that, for the purposes of s. 12(13)(b), “a taxpayer's holding period in respect of a housing unit begins when the taxpayer becomes the owner thereof,” CRA indicated that the housing unit would not be considered to have been held for 365 or more consecutive days before its disposition in December 2023 in the following scenarios:
- Aco amalgamated in January 2023 with its sole shareholder (Bco), which was a property-management company (CRA noted that Bco was a new corporation by virtue of s. 87(2)(a));
- Aco instead was wound-up in January 2023 (CRA noted that the property would be considered to be held by Bco from the time of the property’s distribution on the winding-up);
- Aco transferred the property on a s. 85(1) rollover basis (or on a non-rollover basis) in January 2023 to Bco.
Regarding what was a housing unit [“logement”], with the questioner referring, as examples for consideration, a seniors’ residence, or business premises with a fully-equipped kitchen where dinner was served to the staff, CRA noted that these proposals were introduced as part of legislation “to make life more affordable and build an economy that works for everyone” and stated that “[i]n such a context, the CRA is prepared to interpret the expression ‘housing unit’ with some flexibility” but then stated:
That said, with respect to your specific questions, they are currently under review and will be the subject of consultations with representatives of the Department of Finance in order to provide you with further clarification on the scope of this term.