Qualified donee: Low-cost housing corporation for the aged


Reference number

April 23, 2016

This guidance applies as of April 23, 2016, and replaces the letter dated March 18, 2013 from the Income Tax Rulings Directorate.


A low-cost housing corporation for the aged that wants to become a qualified donee must apply to the Canada Revenue Agency (CRA) for registration. If the corporation meets the criteria, the minister of national revenue may register it as a qualified donee. Then its name, location, registration date, and registration status will be included on a publicly available list maintained by the CRA.

As a qualified donee, the corporation can issue official donation receipts to donors, and Canadian registered charities can make gifts to it. Individual donors can use these receipts to claim a tax credit on their Canadian income tax and benefit return and corporate donors can use them to claim a tax deduction on their Canadian corporation income tax return.


To be eligible for registration as a qualified donee, a low-cost housing corporation for the aged must be resident in Canada and meet the conditions to be exempt from tax under paragraph 149(1)(i) of the Income Tax Act (the Act).

Paragraph 149(1)(i) provides an exemption from Part I tax on the taxable income of:

“a corporation that was constituted exclusively for the purpose of providing low-cost housing accommodation for the aged, no part of the income of which was payable to, or was otherwise available for the personal benefit of, any proprietor, member or shareholder thereof;”

There is no definition of “low-cost housing accommodation exclusively for the aged” in the Act. The CRA has interpreted the key criteria for this provision as follows:

To be constituted exclusively for the purpose of providing low-cost housing accommodation for the aged, a corporation must be both constituted and operated only for that purpose. A corporation that provides housing accommodation mainly for the aged or to persons other than the aged will not qualify for the exemption, on the basis that it is not considered to be exclusively for the aged.

The CRA generally accepts “aged” to be 55 years of age and over.

In the CRA’s view, low-cost housing accommodation for the aged includes comfortable but modest rental accommodation, at rents that are low relative to rents generally available for similar accommodations in the same community (other than subsidized or non-profit accommodations).  

As part of its programs, a low-cost housing corporation for the aged may also provide certain related services such as meals, laundry services, home furnishings, medical/nursing care, house-keeping services, resident aides’ services, and general assistance with matters of daily living.

In addition to these requirements, under the Act, a low-cost housing corporation for the aged must ensure that no part of its income is payable to, or otherwise available for the personal benefit of, any proprietor, member, or shareholder of the corporation. This means that it must not distribute income, either directly or indirectly, to, or for the personal benefit of, any member or shareholder. It also should not have the power to declare and pay dividends out of income. Furthermore, the corporation’s governing documents (letters patent, articles of incorporation, and bylaws) should include a clause specifically prohibiting such distribution of income.

This requirement also applies on its winding-up, dissolution, or amalgamation.

Application process

There is no prescribed application form. To apply, a corporation should send a letter to the CRA’s Charities Directorate, signed by at least one of the corporation’s officials, stating that the corporation is applying for qualified donee registration as a low-cost housing corporation for the aged. The letter should be accompanied by supporting documentation that includes the information as follows:

The corporation should provide as much detailed information as possible to allow the CRA to determine whether it meets the requirements for registration. The letter and supporting documentation should be sent to:

Charities Directorate
Canada Revenue Agency
Ottawa ON  K1A 0L5

If the application process is being handled on the corporation’s behalf by a representative that is not a current director of the corporation, please make sure that the CRA has authorization to communicate with that individual or provide a letter signed by a current director allowing the CRA to do so.

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