Opinion
Budget 2019 – Poor wording requires 2 ex-spouses within 5 years for Home Buyers Plan
This is one of those rare times I hope I am wrong in my interpretation, and look forward to being proven wrong by my professional colleagues.
On March 19, 2019 the federal government tabled its election-year budget. One of the newest and strangest provisions is the ability for people going through a separation or divorce to potentially have access to their RRSP under the Home Buyers Plan.
Now in my article and podcast entitled: “Escape Room – The NEW Small Business Tax Game – Family Edition” with respect to the Tax On Split Income (TOSI) rules, I made a tongue in cheek argument that people will be better off if they split, because then the TOSI rules won’t apply.
In keeping with the divorce theme, beginning in the year of hindsight, 2020, the federal government is giving you an incentive to split up and get your own place.
However, there are a few hoops:
On page 402 of the budget, under new paragraph 146.01(2.1)(a), at the time of your RRSP withdrawal under the Home Buyers Plan, you must make sure that:
- – the home you are buying is not the current home you are living in and you are disposing of the interest in the current home within two years; or
- – you are buying out your former spouse in your current home; and
you need to:
- be living separate and apart from your spouse or common-law partner;
- have been living separate and apart for a period of at least 90 days (markdown October 3, 2019 on the calendar),
- began living separate and apart from your spouse or common-law partner, this year, or any time in the previous 4 years (ok, you don’t have to wait for October); and…
…here is where the tabled proposed legislation gets messy.
Proposed subparagraph 146.01(2.1)(a)(ii) refers to where the individual
- wouldn’t be entitled to the home buyers plan because of living with a previous spouse in the past 4 years that isn’t the current spouse they are separating from
“(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C), and…”
The problem with the wording of this provision, is that it is written in the affirmative by the legislators using the word “and”. This means, you must be able to answer “true” to all the tests for the entire paragraph to apply.
The way I read this, the only way to answer “true” to this subparagraph is if you have a second spouse (ie: spouse other than the spouse referred to) that you shared a home with and you split from in the past four years.
If you have a second spouse that you shared a home with in the past four years, then “paragraph (f)” in the definition of “regular eligible amount” would apply and the answer would be “true”.
If the answer is “true” you can then get access to your RRSP Home Buyers Plan.
If you don’t have a second spouse then, even though “paragraph (f)” might be met, the phrase “spouse other than the spouse referred to” would not be met, and therefore the answer would be “false”.
This would, in turn, cause the entire logic test of the provision to be “false” and so you would not be able to take out a “regular eligible amount” from your RRSP for the Home Buyers plan because you do not meet the provisions.
If my interpretation is correct then I would really be curious as to what part of the economy they are trying to stimulate.
In my opinion the legislation could be fixed with a simple edit:
“(ii) in the absence of this subsection, the individual would not have a regular eligible amount because of the application of paragraph (f) of that definition in respect of:
(A) a spouse or common-law partner; or
(B) a spouse or common-law partner other than the spouse referred to in clauses (i)(A) to (C); and…”
—
Cory G. Litzenberger, CPA, CMA, CFP, C.Mgr is the President & Founder of CGL Strategic Business & Tax Advisors; you can find out more about Cory’s biography at http://www.CGLtax.ca/Litzenberger-Cory.html
Daily Caller
Victor Davis Hanson Condemns California’s DEI Hiring In Fire Departments, ‘Not Muscularity, Not Experience,’ Just DEI
From the Daily Caller News Foundation
By Mariane Angela
Victor Davis Hanson, Wednesday on Newsmax, slammed the implementation of Diversity, Equity, and Inclusion (DEI) criteria in fire department hiring practices in California.
During an appearance on “Finnerty,” Hanson said these policies prioritize DEI above essential firefighting qualifications like experience and physical readiness. Hanson said that hiring workers based on DEI led to an ill-equipped workforce in the state.
“The DEI fire chief, 70% of her hires have been based on DEI. Not muscularity, not experience, not size, not competence. The primary criterion was DEI. And so the only… thing that is different about this is that this was not the inner city. This was, as Donald Trump mentioned, and I’ve taught at Pepperdine, I just got back from there. This is the most elite area of California,” Hanson told Rob Finnerty.
Hanson also said that there’s a broader failure in California’s management of natural resources and emergency preparedness.
WATCH:
“This could have been prevented long-term. We’re letting out all of the water that comes out. 90% of the water from the northern rivers goes out to the sea,” Hanson said. “The aqueduct transfers that water down to LA. They should have had more water. They don’t. The insurance system is completely broken because of overregulation, fraud, and mismanagement by the state. So you cannot buy fire insurance in most cases.”
Hanson said that the systemic failures not only threaten the physical landscape but also risk the financial stability of California’s wealthiest communities, potentially resulting in billions of dollars in losses.
“These are the wealthiest zip codes. And if these people, and many of them didn’t have insurance, even they couldn’t, some of them get insurance. And if this is not going to be rebuilt, they’re going to lose billions of dollars of taxpayers, productive citizens,” Hanson said.
Hanson said there is a need to return to merit-based hiring and sensible state management policies to prevent such disasters in the future.
“And it all could have been prevented had we had meritocratic hiring, had we had plenty water, plenty full of water, if we had a different forest policy, a different firefighting policy, a different insurance policy,” Hanson said.
Actor James Woods also criticized how he said the government handled the crisis as wildfires ravaged Los Angeles. He specifically targeted Democratic California Gov. Gavin Newsom and called him a “blithering idiot.” Woods said the state’s inadequate fire preparedness and response was the result of Newsom’s repeated mismanagement.
Daily Caller
James Woods Smacks Down ‘Blithering Idiot’ Gavin Newsom For Dropping Ball On Forest Management
Amid the wildfires sweeping through Los Angeles, actor James Woods criticized Wednesday on Fox News the government’s handling of the crisis as the state falters in emergency response.
From the Daily Caller News Foundation
By Mariane Angela
As wildfires sweep through Los Angeles and as California falters in its emergency response efforts, actor James Woods appeared on Fox News Wednesday to criticize how the government is handling the crisis.
During an appearance on “The Ingraham Angle,” Woods slammed the government’s response in the city, where residents found fire hydrants dry and their homes ablaze. The actor also criticized how Democratic California Gov. Gavin Newsom has handled the situation. Woods said Newsom is a “blithering idiot” and blamed the governor for what he said was Newsom’s repeated mismanagement of California’s fire preparedness and response.
Woods also directed his attention to Los Angeles Mayor Karen Bass.
“The people in charge, she took over and she put on her bio that her priority, my highest priority is inclusion, diversity, and equity. That is my priority. And somebody forgot to fill all the reservoirs, I guess, with water because when I was getting smoke alarms, there was a fire truck parked in front of my house, but they couldn’t pump any water because there was none, because they didn’t put them in the reservoirs,” Woods said.
The actor drew parallels between the current fire crisis and the recent surge in crime within his community. Woods said he attributed both to a lack of competent leadership.
WATCH:
“It’s the same we had with all the crime we have in our neighborhood, you know, in Los Angeles. When we had that idiot Gascon, you know, they just didn’t care,” Woods told Laura Ingraham. “Everybody was running loose. They were smashing places. You couldn’t walk down the street, you know?”
Woods also said that Newsom’s administration faltered in fulfilling fundamental responsibilities to California during the wildfire.
“If it is true that things were handled this way, if it is true that Gavin Newsom is the absolute blithering idiot that I believe he is in the way he has handled fire management in this state again and again and again and again, this isn’t a wake-up call,” Woods said. “This is the kind of thing they have tribunals for, where they try people and say, you had an oath of office to perform certain duties. When you’re the fire chief, this isn’t a social justice exercise that you’re in charge of.”
Officials from the Los Angeles Department of Water and Power (LADWP) faced scrutiny as many of their fire hydrants failed during critical fire outbreaks. As firefighters battled widespread blazes that devastated numerous structures, they discovered that numerous hydrants under LADWP’s management had run dry.
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