But I swear I am a first time homebuyer... he just isn't!
October 31, 2012 10:18 AM   Subscribe

First Time Homebuyer (Canada) Plan-filter. Can he NOT be considered my common-law spouse?

My boyfriend and I recently got engaged (how recent? Last Friday). We are now looking at purchasing a house together in Toronto in the next 3 months. We have been dating since January 2011, living together in the condo which he owns since September 2011. Last January, we both filed our taxes separately indicating our marital status as being single.

I have $25,000 of assets in an RRSP account which I would like to use to help fund our down-payment per the terms of the Canadian Government’s Home-buyer’s Plan for first-time buyers.

The CRA’s website about eligibility for the plan is pretty straightforward:

“You are not considered a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.”
Then they define a common-law partner as being “a person who is not your spouse, with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies. He or she:
1. has been living with you in such a relationship for at least 12 continuous months;
2. is the parent of your child by birth or adoption; or
3. has custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support.”

Recognizing the following:
• According to what I have reported to the CRA, I am still single (as per what was listed on my last tax submissions) but technically we now qualify as common-law partners based on the fact that we have been living together for 13 months.
• My address was officially changed to his condo as of September 1, 2011
• I would really, REALLY like to be able to use my RRSP’s
Can I still participate without fear of being screwed over tax-wise? Is there a way I can just submit my request and get approval from the CRA to use it?

Thanks in advance tax-expert MeFites!
posted by elkerette to Law & Government (10 answers total)
No, it seems quite clear (as you know) that you can't use the plan because you've lived with your common law partner in a home he owns for more than 12 months. If you are asking how you can get away with doing this anyway, then I'm not sure that's a good idea to ask here.
posted by ssg at 11:00 AM on October 31, 2012 [2 favorites]

I figured as much but hoped someone would have a loophole or something that would let me use them without actually breaking the rules (which I don't want to know).

Ugh. Bad timing on my part!
posted by elkerette at 11:10 AM on October 31, 2012

I think you should "move" out of the home. Perhaps you have felt considerable guilt over living together. Or perhaps you decided to move out because he wasn't willing to buy a condo and you wanted that commitment.
posted by Chaussette and the Pussy Cats at 11:13 AM on October 31, 2012

Definitely what ssg said. But, if you decide to try "moving out" bear in mind that you're not going to be able to use any of the cash from the sale of his condo without raising flags. That's kind of the point of the RRSP thing--the assumption that the only asset you have is your retirement savings. If you've raised the down payment from the sale of another home, that's not just against the letter, it's against the spirit of the law.
posted by looli at 11:34 AM on October 31, 2012 [1 favorite]


Even aside from the clearly-spelled out criteria of the CRA, and if I recall my Ontario Family Law correctly, you are common-law spouses if the relationship is of "some permanence". And of course, that's not defined, but living together for over a year plus a demonstrated intention to marry would definitely qualify.

On the face of it, it looks like you're SOL. But -- again -- IANYL, TINLA, and I cannot give an opinion on your situation in particular.

I would see a financial planner and get their advice on how to proceed. You need to deal with them on withdrawing the RRSPs anyway.
posted by Capt. Renault at 12:29 PM on October 31, 2012

I think you need to talk to a financial planner or better yet a lawyer, but my reading of those three points just as given is that you need to satisfy "1 AND (2 OR 3)", not "1 OR 2 OR 3". The explicit "or" at the end of point #2 is what makes me think this.

Assuming that you do not have a child with your partner, my reading is that you are not in a common-law marriage, based on those criteria alone. (But I'm just some guy on the internet. Woof, woof.)
posted by Kadin2048 at 12:51 PM on October 31, 2012

ssg, looli and Capt. Renault would have it, in my unprofessional (IANYL, TINLA) opinion.

Just to clarify, I'm reasonably certain that Kadin2048 is wrong (sorry!) - the "or" at the end of a semi-colon-separated list, at least in Canadian legislation, is generally intended to mean "any of these semicolon-separated items. I deal with different legislation in my job so I can't speak to that particular provision, but it's a standard format.

Wish we had better news for you. :(
posted by Lemurrhea at 12:56 PM on October 31, 2012

Kadin2048, you missed the explicit "and to whom at least one of the following situations applies" right before the list.
posted by Pinback at 1:08 PM on October 31, 2012 [1 favorite]

My friend's accountant and his wife has been officially "separated" for 17 years, and they live in the same home. They are officially "separated" due to tax reasons. The actual nature of their relationship is as husband and wife. When asked what they would do if investigated, they say that they will tell CRA that they just got back together.

Obviously this accountant has clear ideas about tax laws, and the level of risk they willing to take. I'm just saying if you know the ins and outs it can be done, but I am by no means recommending this type of behaviour.
posted by miles1972 at 1:55 PM on October 31, 2012

Yep, you're right, I missed that. I retract my earlier statement. Sorry about that.
posted by Kadin2048 at 1:57 PM on October 31, 2012

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