Special Rule and Elections for Individual Owners of Multiple Residential Properties

Individual A and Individual B are spouses. Neither they nor their children are citizens or permanent residents of Canada. Their primary place of residence is outside Canada.

Individual A is the only person identified in the land registration system as an owner of a property in Victoria (a detached house) that they purchased in 2017.

Generally, Individual A, Individual B and their children use the property as a vacation home in June, July, August, September and December every year. Although the house is suitable for year-round use as a place of residence and is accessible throughout the year, it is unoccupied the remainder of the year. The Victoria property is not located in an eligible area for purposes of the exemption for vacation properties.

Individual A purchased another property in Vancouver (a residential condominium unit) in late 2021. Individual A is the only person identified in the land registration system as an owner of the property. The Vancouver property is not located in an eligible area for purposes of the exemption for vacation properties.

Neither Individual A nor Individual B is an owner of any other residential properties in Canada.

In late 2021, Individual A receives a Canadian work permit that authorizes them to work for an employer in Vancouver for a nine-month period from January 1 to September 30, 2022. To be closer to Individual A, Individual B and their children spend all of July and August 2022 at the Victoria property.

In 2022, Individual A has continuous occupancy of the Vancouver property from January 1 to September 30 and occupies the property while working in Vancouver under the work permit. Individual A leaves Vancouver on the weekends in July and August to spend time with their family in Victoria.

For each calendar month in the nine-month period from January 1 to September 30, 2022, Individual A occupies the Vancouver property for a greater number of days than the number of days they occupy any other place. No one occupies the Vancouver property while Individual A visits their family in Victoria.

Election filed

The special rule applies to Individual A for the 2022 calendar year because they are an individual who is not a citizen or permanent resident of Canada and they are an owner of multiple residential properties. Generally, this means that unless an election is filed with the CRA, both of the following apply:

• the exemption for primary place of residence cannot be claimed by Individual A for either the Victoria property or the Vancouver property for the calendar year
• any personal occupancy of either the Victoria property or the Vancouver property by Individual A or Individual B cannot be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants) for the calendar year

However, in April 2023, Individual A files an election with the CRA to designate the Vancouver property (that is, one of their multiple residential properties) for the exemptions for primary place of residence and qualifying occupancy for the 2022 calendar year. By designating the Vancouver property in the election, Individual A is declaring both of the following:

• only the Vancouver property can qualify for the exemption for primary place of residence
• only in the Vancouver property can Individual A’s or Individual B’s personal occupancy be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants)

Although Individual A designates the Vancouver property for the two exemptions for the 2022 calendar year, Individual A is only eligible to claim one of the exemptions.

With respect to the exemption for primary place of residence, the Vancouver property does not qualify because Individual A’s primary place of residence is outside Canada.

With respect to the exemption for qualifying occupancy, the period from January 1 to September 30, 2022, is a qualifying occupancy period for Individual A’s ownership of the Vancouver property. It is a period of at least one month in the 2022 calendar year during which a Type 2 qualifying occupant (that is, an owner who occupies the property to pursue authorized work under a Canadian work permit) has continuous occupancy of the property. There are 273 days in the qualifying occupancy period for Individual A’s ownership of the property in the 2022 calendar year.

Vancouver property

Individual A has to file a return for the Vancouver property for the 2022 calendar year by April 30, 2023.

Individual A does not have to pay the underused housing tax for their 100% ownership percentage of the Vancouver property for the 2022 calendar year. They are eligible to claim the exemption for qualifying occupancy because both of the following conditions are met:

• Individual A filed an election with the CRA to designate the Vancouver property (that is, one of their multiple residential properties) for the exemptions for primary place of residence and qualifying occupancy (that is, for Type 2 qualifying occupants) for the 2022 calendar year
• there are at least 180 days in the 2022 calendar year that are included in the qualifying occupancy period for Individual A’s ownership of the Vancouver property

Victoria property

Individual A has to file a return for the Victoria property for the 2022 calendar year by April 30, 2023.

By designating the Vancouver property in the election, Individual A’s ownership of the Victoria property cannot qualify for the exemption for primary place of residence for the 2022 calendar year (even if it was, in fact, their primary place of residence). Similarly, any personal occupancy of the Victoria property by Individual A or Individual B cannot be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants) for the 2022 calendar year.

Where Individual A’s ownership of the Victoria property does not qualify for any other exemption, Individual A has to pay the underused housing tax for their 100% ownership percentage of the Victoria property for the 2022 calendar year. Individual A has to pay the tax by April 30, 2023.

Individual C and Individual D are spouses who are not citizens or permanent residents of Canada. Their primary place of residence is outside Canada.

Individual C and Individual D jointly purchased a property in Toronto (a residential condominium unit) in 2020. Each of the individuals is identified in the land registration system as having 50% ownership of the property.

Individual C and Individual D’s oldest child, who is also not a citizen or permanent resident of Canada, has lived at the Toronto property full time since September 2020 when they started studying under a study permit at a Canadian university that is a designated learning institution. The child regularly receives mail at the property, pays for utilities and internet services and keeps all of their valuable and most-used personal effects at the property. Although the child returns to their parents’ home outside Canada once a year for a short visit, the child intends to continue using the property as their primary place of residence until they graduate in 2024. No one occupies the property when the child visits their parents outside Canada.

Individual C and Individual D jointly purchased another property in Ottawa (a rowhouse unit) in 2021. Each of the individuals is identified in the land registration system as having 50% ownership of the property.

Individual C and Individual D’s youngest child, who is also not a citizen or permanent resident of Canada, has lived at the Ottawa property full time since September 2021 when they started studying under a study permit at a Canadian university that is a designated learning institution. The child regularly receives mail at the property, pays for utilities and internet services and keeps all of their valuable and most-used personal effects at the property. Although the child returns to their parents’ home outside Canada once a year for a short visit, the child intends to continue using the property as their primary place of residence until they graduate in 2025. No one occupies the property when the child visits their parents outside Canada.

Neither Individual C nor Individual D is an owner of any other residential properties in Canada.

Joint election filed

The special rule applies to both Individual C and Individual D for the 2022 calendar year because each is an individual who is not a citizen or permanent resident of Canada and, between them, they are owners of multiple residential properties. Generally, this means that unless a joint election is filed with the CRA, both of the following apply:

• the exemption for primary place of residence cannot be claimed by Individual C or Individual D for either the Toronto property or the Ottawa property for the calendar year
• any personal occupancy of either the Toronto property or the Ottawa property by Individual C or Individual D cannot be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants) for the calendar year

However, in April 2023, Individual C and Individual D file a joint election with the CRA to designate the Ottawa property (that is, one of their multiple residential properties) for the exemptions for primary place of residence and qualifying occupancy for the 2022 calendar year. By designating the Ottawa property in the election, Individual C and Individual D are declaring both of the following:

• only the Ottawa property can qualify for the exemption for primary place of residence
• only in the Ottawa property can Individual C’s or Individual D’s personal occupancy be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants)

Although Individual C and Individual D jointly designate the Ottawa property for the two exemptions for the 2022 calendar year, they are only eligible to claim one of the exemptions.

With respect to the exemption for primary place of residence, the Ottawa property qualifies because it is the primary place of residence of their child who occupies the property while pursuing authorized study at a designated learning institution.

With respect to the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants), the Ottawa property does not qualify because of the following:

• neither Individual C nor Individual D occupy the property to pursue authorized work under a Canadian work permit
• their child who occupies the property does not meet the condition of being a citizen or permanent resident of Canada

Ottawa property

Individual C and Individual D each have to file a separate return for the Ottawa property for the 2022 calendar year by April 30, 2023.

Neither individual has to pay the underused housing tax for their respective 50% ownership percentage of the Ottawa property for the 2022 calendar year because both of the following conditions are met:

• Individual C and Individual D filed a joint election with the CRA to designate the Ottawa property (that is, one of their multiple residential properties) for the exemptions for primary place of residence and qualifying occupancy (that is, for Type 2 qualifying occupants) for the 2022 calendar year
• the Ottawa property is the primary place of residence of an owner’s child who occupies the property while pursuing authorized study at a designated learning institution

Toronto property

Individual C and Individual D each have to file a separate return for the Toronto property for the 2022 calendar year by April 30, 2023.

By designating the Ottawa property in the election, Individual C’s and Individual D’s respective ownership of the Toronto property cannot qualify for the exemption for primary place of residence for the 2022 calendar year. Similarly, any personal occupancy of the Toronto property by Individual C and Individual D cannot be considered for the exemption for qualifying occupancy (that is, for Type 2 qualifying occupants) for the 2022 calendar year.

Where Individual C’s and Individual D’s ownership of the Toronto property does not qualify for any other exemption, they each have to pay the underused housing tax for their respective 50% ownership percentage of the Toronto property for the 2022 calendar year. They have to pay the tax by April 30, 2023.