Category Archives: Primary Residence

Implied Time Limit for GST Rebate on Owner-Built Homes

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Implied Time Limit for GST Rebate on Owner-Built Homes

Solanko v The Queen, 2014 TCC 100

The taxpayer has built a home with the intention to use the home as his primary residence.  The MNR denied the GST rebate under the Excise Tax Act subsection 256(3), and the taxpayer appealed.

The taxpayer, in this case, had built the home 8 years before retirement, with the intention of using the home after retirement as his primary residence.

The Court noted that, although the ETA does not require immediate use of the newly-constructed home as the taxpayer’s primary residence, the legislation cannot have been intended (by parliament) to provide a rebate to persons “based on self-interested statements as to their intentions far into the future” (paras 12-13).  Rather, Justice Woods held that (para 13):

The requirement in the legislation that the residence is constructed for use as a primary residence contemplates that the taxpayer has an intention to use the property as a primary residence closer in time to the construction than is in the case in this appeal.

This statement, reasonably interpreted in light of the other statements by Justice Woods, appears to require time periods and circumstances that would be capable of objectively proving the intention to occupy the newly-constructed home as the taxpayer’s primary residence after the construction of substantial-renovation of the home. This interpretation appears to provide a balance between constraining the benefit and providing flexibility for reasonable life events – taking account of the truism “there’s many a slip between a cup and a lip”.

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New Housing Rebate for Owner-Built Homes – D’Ambrosio 2014 TCC 63

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New Housing Rebate for Owner Built Homes under the Excise Tax Act

D’Ambrosio v The Queen, 2014 TCC 63

The taxpayer built a home on a property jointly owned by himself, his spouse, and his tree children, and claimed the rebate for owner-built homes under the Excise Tax Act, paragraph 256(2)(a), which provides:

Rebate for owner-built homes — Where

(a)   a particular individual constructs or substantially renovates, or engages another person to construct or substantially renovate for the particular individual, a residential complex that is a single unit residential complex or a residential condominium unit for use as the primary place of residence of the particular individual or a relation of the particular individual, …

the Minister shall, subject to subsection (3), pay a rebate to the particular individual equal to the amount determined by the formula …

The taxpayer claimed that the house was the property was the primary residence of his son, and appeared to base this on the fact that this was the only property owned by the son.  However, the evidence showed that the son lived (address on tax returns and driver’s license) and worked (T4 slips) in Toronto. Also, the evidence based on hyro bills shows that the home was only occupied during the summer months.

The Court referred to the decision in Yang v R, 2009 TCC 636, where some of the factors relevant to the determination were provided:

Some of these factors are the following: the parties’ intention with regard to the use of the housing unit as their primary residence; their length of stay at the new unit; the address they use for correspondence; when they moved in and when they moved their personal belongings, and if the move was delayed, what events occurred that caused the delay; details of the insurance coverage; what they did with their former residence or rental unit; and other factors that may be relevant depending on the facts of the case.

The son was unable to provide evidence that he moved into the property, or otherwise that the property was his primary residence.

– Sas Ansari, BSc BEd PC JD LLM PhD (exp) CPA In-Depth Tax 1, 2 &3

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