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Home Buyers Plan Non Resident

If you lived in another country before living in Canada and you leave Canada to resettle in that country, you usually become a non-resident of Canada on the date you leave Canada. This applies even if your spouse or common-law partner temporarily stays in Canada to dispose of your home.

home buyers plan non resident

The Government of Canada has passed a new law to help make homes more affordable for people living in Canada. The Prohibition on the Purchase of Residential Property by Non-Canadians Act prevents non-Canadians from purchasing residential property in Canada for 2 years.

As his Action Plan reflects, President Biden believes the best thing we can do to ease the burden of housing costs is to boost the supply of quality housing. This means building more new homes and preserving existing federally-supported and market-rate affordable housing, ensuring that total new units do not merely replace converted or dilapidated units that get demolished.

Affording a home can be challenging when are you are a first-time buyer. To lend people buying a home a helping hand, as of 2019, the federal government lets home buyers borrow up to a maximum of $35,000 from their RRSPs.

If a taxpayer used his or her RRSP to participate in the HomeBuyer's Plan, repayment of the amount withdrawn will followparticular rules based on whether the non-resident has built orbought a qualifying home when he or she become a non-resident.

At time of writing, there are 94 tax treaties in force betweenCanada and other countries. Other treaties are currently signed butnot in force, or are under negotiation. Each tax treaty dictateswhich of the two signatory countries can tax particular paymentsand what taxation rates are applied to each type of payment. Forexample, Canada's default withholding tax rate is 25%. Underthe United States-Canada Tax Treaty, periodic payments from an RRSPare taxed at a 15% withholding rate, and lump-sum payments from anRRSP are taxed at the default 25% withholding rate. For thosetaxpayer who are considering emigration or have emigrated to acountry who has a tax treaty with Canada, our experienced Canadiantax lawyers can interpret the relevant treaty and advise you on anycontinued Canadian tax obligations. Our experienced Canadian taxlawyers can additionally advise on issues related to emigration taxplanning, departure tax and tax planning to qualify as a non-resident ofCanada for tax purposes.

The specific requirements for preparing a homeownership plan under Section 32 are set out in the Section 32 Desk Guide, the Inventory Removals Application (HUD-52860), the Homeownership Addendum (or Homeownership Term Sheet) to that Application (HUD-52860-C), and the tools available for download below. The Homeownership Addendum/Term Sheet must be completed to show program compliance and due diligence and must be attached to a PHA's application for homeownership. After HUD approval, the Homeownership Addendum/Term Sheet becomes a part of the PHA's approved Homeownership Plan. All other documents are optional and should be used at discretion of the PHA.

PHAs should submit their Homeownership Plan (which includes the Inventory Removals Application, HUD-52860 and Homeownership Addendum/Term Sheet, HUD-52860-C) to the HUD Special Applications Center (SAC) in Chicago via PIC as previously noted elsewhere on this site. For those plans covering units not in PIC, contact SAC management for concurrence to submit hard copy applications.Non-Qualified PHAs (as identified under the Housing and Economic Recovery Act of 2008 (HERA)must state their intent to submit a homeownership plan to HUD in their Annual PHA Plan. Qualified PHAs (as identified under HERA) must state their intent to submit a homeownership plan to HUD in their 5-Year PHA Plan. The SAC will not review any homeownership plan not addressed in a PHA Plan.The required components of the Homeownership Plan, as outlined in 24 CFR Part 906.39, must include at a minimum:

Sale and Financing - The PHA must demonstrate the practical workability of the Homeownership plan, based on analysis of data on such elements as purchase prices, costs of repair or rehabilitation, homeownership costs, family incomes, closing costs, availability of financing and the extent to which there are eligible residents who are expected to be interested in the purchase of these units. Additionally, the PHA must provide types and amounts of assistance/subsidy to be provided to eligible families, including source of funds, terms of loan(s), including second mortgages, description of any grant(s), subsidy limits for second mortgages, if any, Fair Market Value (FMV) and any discount the PHA may offer, and resale/recapture restrictions as established by the PHA.

Resident and Purchaser Consultation - If the PHA intends to sell existing public housing, the PHA must describe in its application the resident input obtained during the resident consultation planning process, and provide a plan for consultation with purchasers during the implementation stage. The BGHA must meet with the Authority's Resident Advisory Board (RAB) to discuss and develop a mechanism to ensure resident involvement in implementing the Section 32 Homeownership program, and provide supporting documentation regarding the meetings held with the RAB to discuss the Homeownership program. Copies of meeting announcements, notices, sign-in-sheets and minutes of meetings are required.

Counseling - The PHA must describe its plans and requirements regarding homeownership counseling for eligible purchasers. Additionally, the PHA must provide qualifications of the counseling provider(s), if applicable, that will provide homeownership counseling, training and technical assistance provisions for eligible families, including duration of counseling and training, and curriculum/scope of services for the agency under the homeownership proposal.

Sale via Purchase and Resale Entity (PRE) - If plans are to use a PRE for the sale of units, the PHA must provide the firm's qualifications, marketing plan, and a description of that entity's responsibilities as well as information demonstrating that the written agreement between the PRE and PHA contains or will contain the rights and responsibilities of parties; assurances of compliance with program requirements; assurances of deed restrictions on acquisition and resale of units; description of how the net proceeds will be determined and used; protections against fraud and misuse; limitations on overhead and profit; record keeping/reporting requirements; assurances of non-discrimination against eligible purchasers; adequate legal remedies; assurances of sale only to low-income households; a five-year limit on sale to eligible buyers; and the notification process to households (relocation, environmental review).

Non-Purchasing Residents - The PHA must provide a relocation plan for non-purchasing public housing residents for purposes of transferring possession of the unit. The PHA must provide a notice 90 days before displacing the resident, provide for payment of actual costs and reasonable relocation expenses, ensure that the resident is offered comparable housing and counseling.

Section 32 Sales Proceeds Guidance - A PHA may realize gross sales proceeds in connection with selling homes under a Section 32 homeownership program. As part of the homeownership plan submitted to HUD, the PHA must describe the sources from which it will likely realize gross sale proceeds, along with its intended use of those proceeds. Gross sales proceeds will likely derive from the two primary sources: (1) payments made by homebuyers for credit to the purchase price (e.g. earnest money, down payments, payments out of the proceeds of mortgage loans, payments made under a lease-purchase arrangement, principal and interest payments under a purchase-money mortgage, etc.); and (2) payments made to the PHA upon resale of the homeownership units, including any earned interest.A PHA may use gross sale proceeds to pay for the costs related to the sale of the homeownership units (costs may include payments of construction costs, developer fees, counseling agency fees, etc). If any net proceeds remain after these costs have been paid, a PHA may use those remaining net sale proceeds as provided in its HUD-approved homeownership plan. HUD will approve the use of proceeds in a homeownership plan if the PHA evidences that the proceeds will be used for purposes related to low-income housing, as defined by the Act. The Act defines low-income housing as decent, safe, and sanitary dwellings assisted under the Act. Therefore, PHAs are only permitted to use Section 32 homeownership program proceeds in connection with public housing units under an ACC, housing assisted by the Housing Choice Voucher Program, or to fund a homeownership plan under the Act.A non-exhaustive list of some of the acceptable HUD-approved uses of net sale proceeds from a Section 32 homeownership program include: (1) repair or rehabilitation of existing ACC units; (2) development and/or acquisition of new ACC units; (3) provision of social services for PHA residents; (4) implementation of a preventative and routine maintenance strategy for specific ACC units; and (5) modernization of a portion of a residential building in the PHA's inventory to develop a recreation room, laundry room, or day-care facility for PHA residents; (5) modernization of a portion of a residential building in the PHA's inventory to develop a recreation room, laundry room, or day-care facility for PHA residents; and (6) funding of another HUD-approved homeownership program authorized under Section 32, 9, 24 or any other Section of the Act, for assistance to purchasers, for reasonable planning and implementation costs, and for acquisition and/or development of homeownership units; (7) in connection with the homeownership plan from which the proceeds are derived, for purposes that are justified to ensure the success of the plan and to protect the interests of the homeowners, the PHA, and any other entity with responsibility for carrying out the plan (e.g. a reserve for the PHA to repurchase, repair and resell the homes in the event of defaults) (8) leveraging of proceeds in order to partner with a private entity for the purpose of developing mixed-finance housing (that will include ACC units) under 24 CFR 941 (Subpart F).If the homeownership plan utilizes a PRE, the PHA may opt to have the PRE return sale proceeds to the PHA or may permit the PRE to use them for low-income housing purposes.Sale Proceeds and Asset Management (Section 32 Homeownership Proceeds) - In its written approval of a Section 32 homeownership plan, the SAC will restrict the use of any proceeds that a PHA may realize from Section 32 homeownership proceeds to a specific low-income housing purpose (e.g. ACC, Section 32, or Section 8). Accordingly, under asset management, Section 32 homeownership proceeds will always be restricted program assets and will always maintain their federalized identity.When a PHA realizes net proceeds from Section 32 homeownership plan, it should recognize any gain or loss on sale on the income statement associated with the balance sheet where that asset is recorded. If approval has been obtained to use the sales proceeds for activities outside the original AMP, the PHA should then, when the time is appropriate, transfer those proceeds to the other project or program where the use has been permitted. For example, if the SAC approves the use of Section 32 proceeds for the modernization of a certain AMP, the PHA should, first, recognize the gain on the income statement of the original project but then transfer the funds to the project where the modernization work will occur. Any retained sales proceeds should be reflected as a ?restricted? asset on the balance sheet (restricted for the uses specifically approved by the SAC). A PHA must use net proceeds in accordance with the spending and financial reporting requirements under the revised 24 CFR Part 990. Please consult a HUD financial manager for additional guidance and/or clarification of these reporting requirements. 041b061a72


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