A home-relocation loan is a loan you give to an employee or an employee's spouse or common-law partner when they meet all of the following conditions:
- The employee or the employee's spouse or common-law partner moves to start work at a new location in Canada
- The employee or the employee's spouse or common-law partner uses the loan to buy a new residence that is at least 40 kilometres closer to the new work location than the previous home
- The employee or the employee's spouse or common-law partner receives the loan because of the employee's employment
- The employee designates the loan as a home-relocation loan
- The loan is used to acquire a residence or a share of the capital stock of a co-operative housing corporation acquired only to obtain the right to inhabit a residence owned by the corporation. The residence must be for the habitation of the employee and be their new residence
Only a debt that is a loan can be a home relocation loan.
To calculate the benefit for the home-relocation loan, see Loans received because of employment.
Include the amount of the taxable benefit in box 14, “Employment income,” and in the “Other information” area under code 36 at the bottom of the employee’s T4 slip.
The amount of interest you calculate as a benefit should not be more than the interest that would have been charged at the prescribed rate in effect when the employee received the loan.
If the term of repayment for the home-relocation loan is more than five years, the balance owing at the end of five years (from the day the loan was made) is considered a new loan. Treat the outstanding balance as a new loan on that date. To calculate the benefit, use the prescribed rate in effect at that time.
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