Income Tax Act — I-3.3 80.4
ebt), have been agreed on, at the time the loan was received or the debt was incurred, between parties dealing with each other at arm’s length if (i) none of the parties received the loan or incurred the debt by virtue of an office or employment or by virtue of the shareholding of a person or partnership, and (ii) the ordinary business of the creditor included the lending of money, except where an amount is paid or payable in any taxation year to the creditor in respect of interest on the loan or debt by a party other than the debtor, (b) that was included in computing the income of a person or partnership under this Part; or (c) that satisfies the conditions set out in subsection 15(2.51) and is repaid within 15 years after the qualifying business transfer referred to in that subsection. Interest on loans for home purchase or relocation (4) For the purpose of computing the benefit under subsection (1) in a taxation year in respect of a home purchase loan or a home relocation loan, the amount of interest determined under paragraph (1)(a) shall not exceed the amount of interest that would have been determined thereunder if it had been computed at the prescribed rate in effect at the time the loan was received or the debt was incurred, as the case may be. Idem (5) Where an individual has, before November 13, 1981, (a) received a housing loan, or (b) made arrangements in writing in respect of a home purchase loan that would, if the loan were made before 1982, have been a housing loan, for the purpose of computing the amount of interest referred to in paragraph 80.4(1)(a) on the loan, the amount of the loan may be reduced (c) for the 1982 taxation year, by the amount, if any, by which $40,000 exceeds the total of (i) all amounts claimed as a reduction under this subsection for the year by the individual’s spouse or common-law partner with whom the individual resided in the year, and (ii) all amounts claimed as a reduction under this subsection for the year by the individual on all other loans, and (d) for the 1983 taxation year, by the amount, if any, by which $20,000 exceeds the total of (i) all amounts claimed as a reduction under this subsection for the year by the individual’s spouse or common-law partner with whom the individual resided in the year, and (ii) all amounts claimed as a reduction under this subsection for the year by the individual on all other loans. Deemed new home purchase loans (6) For the purposes of this section, other than paragraph 80.4(3)(a) and subsection 80.4(5), where a home purchase loan or a home relocation loan of an individual has a term for repayment exceeding five years, the balance outstanding on the loan on the date that is five years from the day the loan was received or was last deemed by this subsection to have been received shall be deemed to be a new home purchase loan received by the individual on that date. Definitions (7) In this section, home purchase loan means that portion of any loan received or debt otherwise incurred by an individual in the circumstances described in subsection 80.4(1) that is used to acquire, or to repay a loan or debt that was received or incurred to acquire, a dwelling, or a share of the capital stock of a cooperative housing corporation acquired for the sole purpose of acquiring the right to inhabit a dwelling owned by the corporation, where the dwelling is for the habitation of (a) the individual by virtue of whose office or employment the loan is received or the debt is incurred, (b) a specified shareholder of the corporation by virtue of whose services the loan is received or the debt is incurred, or (c) a person related to a person described in paragraph (a) or (b), or that is used to repay a home purchase loan; ( prêt consenti pour l’achat d’une maison ) prescribed rate of interest means (a) 6% per annum before 1978, (b) 8% per annum for 1978, and (c) for any year, or part thereof, after 1978, such rate of interest as is prescribed therefor except that,