New Housing Rebate – Timing of Intention to use as Primary Residence

Kukreja v The Queen, 2014 TCC 56

At issue was the timing for purposes of the new housing rebate under the Excise Tax Act, RSC 1985 c E-15.  The court stated that if at the time the Appellant signed the agreement, the house was being purchased with the intention to use it as her primary place of residence, then she is entitled to the new housing rebate (subsection 254(2) of the ETA). In order to determine intention the court must consider both the stated intention and the surrounding facts relevant to the intention.

The Appellant, in 2009, signed the agreement for purchase and sale of a house to be constructed on a property.  She purchased and closed, but never moved into the property.

The Court rejected the Appellants stated intention because:

•  the appellants family income at the date of signing the agreement was not sufficient to cover the mortgage on the home and their living expenses
• the business of the appellant did not show the income that would support such a purchase
• the appellants may have been ‘dreamers’ but the court did not accept that they were unrealistic to this degree
• the appellant could not remember the number of bedrooms and bathrooms in the house seems unlikely if the house was purchased for themselves

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