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GOODS AND SERVICES TAX (GST) - Rebates - New housing

Thursday, July 25, 2019 @ 8:09 AM  

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Appeal by the Crown from a judgment of the Tax Court that determined the respondent was entitled to the new housing rebate. In 2012, the respondent, a real estate agent, signed an agreement to purchase a condominium as a co-purchaser to preserve the rights of her client. After the agreement was signed, the client decided not to complete the purchase and the client’s name was replaced by the respondent’s nephew, who intended to buy the condo as his place of residence. At closing, the respondent was put on title to the property with a 49 per cent interest. The Tax Court found the respondent acted as agent for her nephew and held her interest in the property in trust for him. He concluded only the nephew had to satisfy the occupancy requirements, which he had.

HELD: Appeal allowed. It was an error of law to find a person who was not a “particular individual” for the purposes of s. 254 of the Excise Tax Act was still eligible to claim the new housing rebate. Based on ss. 251(2) and 251(6) of the Income Tax Act, a nephew was not related to his aunt or uncle and therefore the respondent’s nephew was not her relation. Since the respondent never intended to occupy the condo and did not actually occupy it as her place of residence, she was not a “particular individual” for the purposes of s. 254(2) of the Excise Tax Act. She was not entitled to claim the new housing rebate.

Ngai v. Canada, [2019] F.C.J. No. 713, Federal Court of Appeal, J. Gauthier and W.W. Webb JJ.A. and M. Rivoalen A.C.J., June 14, 2019. Digest No. TLD-July222019011