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Hi David,
I have a client whose wife has been in a coma for about ten years now with
no sign of recovery. No Power of Attorney was ever signed prior to this
tragedy, and so my client cannot divorce her, sell the house etc. After all
these years a new lady has come into his life and he and the new lady are
now living common law, in my client's house (which is still owned jointly
with the 1st spouse). My understanding is that because both ladies would
technically qualify as "spouses" in CRA's eyes he has to choose one or the
other to treat as his "tax" spouse. He has chosen the comatose spouse. Now
here's the question.
Because the new lady does not, by CRA's definition, have a spouse, (1) will
her summer cottage in the Okanagan qualify as her principal residence
assuming she "ordinarily inhabits" it etc. and (2) would she qualify for the
provincial home owner's property tax grant?
Your insight on this would be much appreciated.
Thanks
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david ingram replies:
I don't think it works in any legal sense because if they are thought of in the community as a couple, the common-law wife will be the one who is considered to be the spouse for the purposes of the Canada Pension Plan for instance Although it could be split.
I think that claiming the Okanogan cottage as her principal residence likely has validity though. He cannot marry the lady formally without a divorce from the first wife. I would claim it tax free for both the homeowner's grant and capital gains purposes. Claiming it tax free is likely a valid claim because it is sure not clear cut. I can also see the CRA challenging it all the way to "here".
In a similar instance, the common-law wife refused to be a "wife" until hubby died, then she was very quick to apply for the CPP widow's benefits which she is receiving now, thank you.
I am putting your question out on the list. Perhaps one of our lawyer readers would like to comment. How about it? any comments?
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