Background
Ernest Salac agreed in 2016 to purchase a pre-construction condominium at 403 Church Street in Toronto and took possession in August 2020. The builder credited him with a $24,000 GST/HST new housing rebate. Salac maintained that he and his husband occupied the unit for approximately seven months before renting it to a tenant beginning in April 2021.
The Minister denied the rebate and confirmed the assessment after Salac objected. Before the Tax Court, Salac argued that the condominium was intended to become the couple’s primary residence and that pandemic-related developments disrupted their plans. The Minister contended that neither Salac nor his husband had the required primary-residence intention when the purchase agreement was made and that they had not first occupied the unit as a place of residence.
The Court’s Holding
The Tax Court dismissed the appeal without costs. It held that Salac had not established, on a balance of probabilities, that he acquired the condominium for use as his or a qualifying relation’s primary place of residence, as required by paragraph 254(2)(b) of the Excise Tax Act. Salac continued working full-time and spending weekdays in Peterborough, the couple’s Peterborough property remained available, their address records were not changed, their alleged Toronto occupancy was brief, and the unit was soon rented.
The Court also found the evidence insufficient to show that Salac or his husband first occupied the unit “as a place of residence” under paragraph 254(2)(g). Undated photographs, an internet installation order, and limited utility records indicated some use but did not establish residential occupation with the necessary degree of settled connection or permanence. Because every condition in subsection 254(2) had to be met, failure to prove either disputed requirement defeated the rebate claim.
Key Takeaways
- A new-housing rebate claimant must prove a clear and settled intention, when assuming liability under the purchase agreement, to use the particular property as a primary residence.
- Courts assess stated intention against objective circumstances, including employment, time spent at competing residences, address changes, movement of personal effects, utility records, and later rental activity.
- Being first to enter or use a unit is not enough: occupation “as a place of residence” requires more than temporary, occasional, or minimally documented presence.
Why It Matters
The decision underscores the separate evidentiary demands of the rebate’s intention and occupancy requirements. Later conduct does not automatically determine intention at purchase, but it can be powerful evidence of whether the asserted plan was genuine and settled.
Purchasers claiming a rebate while maintaining another available home should preserve detailed, contemporaneous evidence showing that the new property became the centre of their ordinary residential life. Pandemic disruption or changed financial circumstances will not substitute for proof that an actual-occupancy requirement was satisfied.