Tax Court Rejects GST/HST New Housing Rebate Claims

Dockets: 2024-2141(GST)I 2024-2145(GST)I BETWEEN: [NAME_1], Appellant, and HIS [NAME_2] [NAME_3], Respondent . Appeal heard on April 29, 2026, at Montreal, Quebec Before: The [NAME_4] : Agent for the Appellant: [redacted] Counsel for the Respondent: [redacted]

JUDGMENT In accordance with the attached Reasons for Judgment; The appeals from assessments made under the Excise Tax Act dated January 24, 2024, and February 9, 2024, each in respect of the Goods and Services Tax/Harmonized Sales Tax New Housing Rebate, are dismissed, without costs. Signed this 26th day of June 2026 “[NAME_4]” [NAME_4] J. Citation: 2026 TCC 122 Date: 20260626 Dockets: 2024-2141(GST)I 2024-2145(GST)I BETWEEN: [NAME_1], Appellant, and HIS [NAME_2] [NAME_3], Respondent.

REASONS FOR

JUDGMENT [NAME_4] J. [ 1 ] Each of these two Appeals concerns the eligibility of the Appellant for a Goods and Services/Harmonized Sales Tax ( “GST/HST” ) New Housing Rebate (the “Rebate” ). File 2024-2141(GST)I relates to a property in downtown Montreal (the “[NAME_8]” ) and File 2024-2145(GST)I relates to a property near the Lachine Canal in Montreal (the “[NAME_9]” , together with the [NAME_8] being the “Properties” ). The two Appeals were heard on common evidence. [ 2 ] I note at the outset that the Appellant did not attend the trial. [ADDRESS] was informed that the Appellant had returned to China shortly after surgery for throat cancer in 2022, and might never return to Canada. As one adjournment had already been granted to provide the Appellant with an opportunity to attend the trial in person, the Appellant chose not to request a second adjournment. The Appellant’s daughter, [NAME_10], testified on the Appellant’s behalf.

I. Factual Background [ 3 ] The following background was provided primarily through the testimony of [NAME_10]. I found her to be a credible and reliable witness. She testified that the Appellant and his wife (her mother) came to Canada from China to be closer to their daughter. Her father initially lived with her when he arrived, but, as a result of some inter-family conflict, he decided it would be preferable to live in a separate property. There was no indication that the Appellant’s wife had also moved in with [NAME_10], nor was there any evidence regarding the circumstances surrounding the arrival of the Appellant’s wife in Canada. [ 4 ] The Appellant entered into a preliminary contract for the [NAME_8], a divided co-ownership, on June 5, 2017 for $143,000 (not including goods and services tax ( “GST” ) and Quebec Sales Tax ( “QST” )) with the purchase closing on December 13, 2019. [NAME_10], a real estate agent who ran her own real estate brokerage business, acted as the Appellant’s power-of-attorney and the real estate agent in respect of the purchase. The [NAME_8] was not close to [NAME_10]’s residence; [NAME_10] testified that her father did not like the neighbourhood in which [NAME_10] lived at the time. The [NAME_8] was a studio apartment of approximately 20 square meters. [NAME_10] testified that her father told her that he and his wife did not need much space as they intended to return to China regularly. The apartment had a murphy bed. To [NAME_10]’s knowledge, most of her parents’ time in Montreal was spent taking walks, visiting their daughter and watching Chinese TV accessed through the internet. [NAME_10] testified that her father did not speak French or English, and therefore did not watch North American television programs. Home insurance, in the Appellant’s name, was obtained for the [NAME_8]. An invoice from [NAME_11] was also submitted. It indicated a charge for “[NAME_11] 25 Yearly Service Fee” of $438.89 for the period between February 17, 2021 and February 16, 2022, a yearly modem rental fee of $0 and a yearly router rental fee of $0 for the [NAME_8]. In addition, a number of [NAME_12] invoices were provided; these electricity invoices ranged from $26.49 to $77.50 per month; of the 16 monthly invoices provided, approximately half were less than $40. [ 5 ] [NAME_10] testified that her father paid income tax in Canada, and that the [NAME_8] was his principal residence. It was unclear whether [NAME_10] was taking into account her father’s residence in China, if any, when making these statements. [ 6 ] Roughly two years later, the Appellant and his wife decided to move to a bigger unit and therefore the Appellant bought the [NAME_9]. They rented out the [NAME_8]. The lease for the [NAME_8] indicated that, along with the murphy bed, the apartment was being rented with one table and two chairs. [NAME_10] testified that she did not know what her father’s intentions were regarding the leasing of the [NAME_8]. [ 7 ] The [NAME_9], another divided co-ownership, was purchased for $184,865.00 and closed in early February of 2022. The Reply assumes that the Appellant acquired the [NAME_9] on August 20, 2021, although this assumption might have been based on a header of the deed of sale that may refer to a different aspect of the document and is inconsistent with the signature blocks. No evidence was adduced as to the date of the preliminary contract. [NAME_10] was again the real estate agent in respect of this purchase and again had power-of-attorney for her father. This apartment was also a studio apartment but was much larger than the [NAME_8]. Home insurance, in the Appellant’s name, was obtained for the [NAME_9]. A summary of [NAME_12] invoices was provided which included an amount of roughly $20 or $30 (the photocopy was faded and therefore the exact number was difficult to identify) for the period ending February 28, 2022. Shortly after the [NAME_9] was purchased, the Appellant underwent surgery for throat cancer. It was at this point that he and his wife decided to return to China. There was no evidence adduced regarding whether any of the furniture or personal possessions of the Appellant and/or his wife were moved into the [NAME_9]. [ 8 ] [NAME_10] testified that her mother had purchased another condominium for investment purposes. [NAME_10] was not aware of any other properties purchased or occupied by her parents notwithstanding some records produced by the Respondent regarding a connection of the Appellant to a property in Sherbrooke, Quebec. [ 9 ] There was no evidence that the Appellant had applied for a Rebate in respect of any property other than [COMPANY_13]. [ 10 ] A number of the documents associated with the acquisition of [COMPANY_13] indicated that the Appellant’s address was a residence on St. [ADDRESS], and then subsequently on [ADDRESS]. [NAME_10] testified that these addresses were hers, but that her father was not accustomed to receiving mail because documents are typically sent electronically in China and therefore wished his daughter to take care of his paperwork. [ 11 ] The Appellant and his wife also worked for their daughter’s company part-time, primarily doing marketing, publicity and client development in Chinese for their daughter. [ 12 ] There was some testimony as to the Appellant’s intention, including whether and/or when the Appellant intended to rent [COMPANY_13]. However, that testimony is hearsay. That testimony cannot be admitted under the traditional categorical exceptions to hearsay, nor is it sufficiently necessary or reliable to meet the principled exception (as articulated in cases such as The Queen v [NAME_14] , 2024 SCC 29).

Accordingly, I am disregarding any testimony of [NAME_10] regarding her father’s intentions. [ 13 ] [NAME_15], an auditor, testified on behalf of the Respondent. I found him credible and reliable.

II. Legal Background and Basis for Assessment [ 14 ] Under subsection 254(2) of the Excise Tax Act (the “ETA” ), an individual is eligible for a partial rebate of GST/HST on the purchase of a residence from a builder where certain requirements are met. One of these requirements is in paragraph 254(2)(b) of the ETA, which states that: at the time the [NAME_16] becomes liable or assumes liability under an agreement of purchase and sale of the complex or unit entered into between the builder and the [NAME_16], the [NAME_16] is acquiring the complex or unit for use as the primary place of residence of the [NAME_16] or a relation of the [NAME_16] . [ 15 ] A second requirement is in paragraph 254(2)(g) of the ETA which provides, as applicable to these facts, that the first person to occupy the unit as a primary place of residence at any time after substantial completion of the construction must be the [NAME_16] or a relation thereof. A “relation” of a [NAME_16] is defined in subsection 254(1) of the ETA as another individual who is related to the [NAME_16], as well as certain other individuals. Subsection 126(2) of the ETA refers us to subsections 251(2) to (6) of the Income Tax Act , which in turn provide that a person connected by marriage to an individual is related to that individual. [ 16 ] The Respondent argues that neither the requirement in paragraph 254(2)(b) nor the requirement in paragraph 254(2)(g) has been met in respect of either of [COMPANY_13]. No other requirements of the Rebate have been put into issue.

III. Intention to [ADDRESS] of Residence – 245(2)(b) [ 17 ] I considered whether, at the time the preliminary agreements were entered into, the Appellant acquired the relevant Property for use as the primary place of residence for him or a relation. [ 18 ] Unfortunately, as stated above, the Appellant did not attend trial and therefore did not provide testimony as to his intentions. In addition, as noted above, I have disregarded any testimony of [NAME_10] regarding the Appellant’s intentions, but note that in any case this testimony was minimal. On this basis alone, there is no positive evidence of the Appellant’s intentions when he purchased either Property. [ 19 ] In addition, the evidence before me raises serious questions as to whether the Appellant did indeed intend to acquire either of [COMPANY_13] for use by himself or a relation as a primary residence. First, in respect of the [NAME_8], there is evidence that the Appellant’s wife bought another property and rented it out. Although the timing of the purchase of that property is unclear, it appeared that the purchases of the two properties may have occurred reasonably close in time. I question whether, at the time the [NAME_8] was purchased, it was clear that the Appellant would be using the [NAME_8] as a residence and his wife would be renting out the other property, or whether, at the time of the purchase of the [NAME_8], there was some question about which would serve as the residence and which would serve as the investment property. As this Court stated at paragraphs 7 and 8 of [NAME_17] v The Queen , 2019 TCC 58: [w]hat is required is a clear and settled intention to occupy the premises as a “primary place of residence” , considered in the context of an individual’s personal, family and work related circumstances. A tentative, fleeting or whimsical intention does not suffice . Parliament’s use of the word “primary” also suggests that the purchaser must have a settled intention to centre or arrange his personal and family affairs around that property. The rebate is not intended for a secondary residence or “pied-à-terre”.. . [ underlining added ] [ 20 ] Second, as I will set out below, I am not persuaded that the [NAME_8] was actually the primary residence of the Appellant; rather, the [NAME_8] did seem to be a type of “pied-à-terre” for the Appellant and his wife while in Montreal. The [NAME_8] was extraordinarily small, particularly for 2 people. That fact alone is strong evidence that the Appellant did not intend to spend significant amounts of time at the [NAME_8]. As there is no evidence to the contrary, on this basis I find that, on the date of purchase, the Appellant intended the [NAME_8] to be a pied-à-terre in Montreal, and not his primary residence and therefore the Appellant did not have a settled intention to use the [NAME_8] as the primary residence for himself or a relation. [ 21 ] With respect to the [NAME_9], the increased size does suggest that there might have been some possibility that the Appellant intended to make the [NAME_9] his primary residence. However, there was no evidence regarding the circumstances under which the decision to purchase the [NAME_9] was made, the furnishing of the [NAME_9], a comparison of the Appellant’s ties to the [NAME_9] in contrast to his ties with any property in China, a comparison of an intended change of lifestyle in respect of the [NAME_9] as compared to the [NAME_8] or any intention of the Appellant for him or his wife to spend more time in Canada. Furthermore, the facts that the Appellant and his wife returned to China shortly after purchasing the [NAME_9] in 2022 and have not returned to Canada since then suggest, in the absence of any evidence to the contrary, that the Appellant’s locus of living remained in China.

Accordingly, I find that, on the date of purchase, the Appellant did not intend the [NAME_9] to be used as the primary residence for himself or a relation.

IV. Occupation as a [ADDRESS] of Residence [ 22 ] [ADDRESS] in [NAME_18] v The Queen , 2018 TCC 258 set out a list of factors to be considered when determining whether a property has been occupied for purposes of paragraph 245(2)(g) of the ETA. These are described by the Court at paragraph 15 as follows: a) demarcation of primary place of residence by change of address; b) the relocation of sufficient personal effects to the rebate property; c) if no occupancy of the residence, was there cogent evidence of frustration of occupancy; d) permanent occupant insurance versus seasonal or rental coverage; e) delivery of possession of previous primary residence to another; f) if dual occupancy continues, then the rebate property must be more frequently occupied, more convenient to third party locations such as work, more convenient amenities and more suitable to the needs of the taxpayer. [ 23 ] A number of cases have commented on the quality of occupation necessary to satisfy the residency requirement in paragraph 254(2)(g). For example, in [NAME_19] v. The Queen , 2016 TCC 13 at paragraph 29, the Court states that “[t]ransitory occupancy cannot satisfy the requirement that the purchaser be ‘the first individual to occupy the complex’ within the meaning of paragraph 254(2)(g) of the ETA.” [ADDRESS] in [NAME_20] v The Queen , 2014 TCC 276 stated at paragraph 21 as follows: Taking a few belongings (mattresses and towel for example), leaving behind virtually all of your other belongings and furnishings in the family home, does not constitute actual use of …[the property in question]…as the primary place of residence for the family. At best, I would describe [NAME_20]’s and his daughter’s arrangement as camping, not residing – certainly not residing as a primary place of residence . [ 24 ] [ADDRESS] in paragraph 24 of [NAME_20] v [NAME_3] , 2023 TCC 102 states the following, in part: It is my view that occupancy is something more than simply having a mattress with a set of sheets and pillowcases and a table on the premises. Although the Appellant did some measure of staying at the premises in question, two nights per week, this certainly could not classify one as occupying the premises. What he did was arrange for the heat to be turned on at the premises, but he had to have heat at the premises because of the weather conditions. He arranged for home insurance coverage, but this would be a requirement in order to obtain any financing whether it be a conventional or private lender. He arranged for internet, but then again if he is going to spend anytime [sic] at the premises he would need internet in this day and age. What he did not do speaks more with respect to whether or not there was an occupancy of the residence by the Appellant… [ 25 ] There was little evidence regarding the furnishing of the [NAME_8]. Although a few items of furniture were noted in the rental agreement for the [NAME_8], there was no suggestion that these items constituted the entirety of the contents of the [NAME_8] while it was occupied by the Appellant and his wife. However, there was no other positive evidence as to those contents, whether oral descriptions, receipts, photographs or otherwise. And although certainly possible, it seems unlikely, in the absence of any evidence to the contrary, that the Appellant and his wife, already grandparents at the relevant time, who had the means to purchase other properties, would be content to sleep on a murphy bed the majority of the time. [ 26 ] One of the factors upon which the Court in [NAME_21] v The Queen , 2016 TCC 257 based its conclusion that the appellant in that case was not resident in the house for purposes of the Rebate was very low hydroelectric and water bills. See, similarly, [NAME_22] v The Queen , 2014 TCC 268 and [NAME_23] v The Queen , 2018 TCC 36. In this case, the [NAME_12] invoices for the [NAME_8] were very low, particularly for two people. [ 27 ] I also note that the reference to a “primary” place of residence does not mean the primary place of residence in comparison only to other potential residences in Canada; it means the primary place of residence compared to any other potential residence worldwide. [ 28 ] I find that neither the Appellant nor his wife occupied the [NAME_8] as a primary residence. [ 29 ] Regarding the [NAME_9], I acknowledge that a planned occupation of that Property as a primary place of residence may have been frustrated by the Appellant’s cancer diagnosis. However, again, there is insufficient evidence to support the view that the Appellant or his wife would have occupied the [NAME_9] as a primary place of residence in the absence of that diagnosis. As stated above, there is no evidence regarding any plans to change the lifestyle of the Appellant or his wife in light of the larger space being acquired, the circumstances under which the decision to purchase the [NAME_9] was made, the furnishing of the [NAME_9], a comparison of the Appellant’s ties to the [NAME_9] in contrast to his ties with any property in China, a comparison of an intended change of lifestyle in respect of the [NAME_9] as compared to the [NAME_8] or any intention of the Appellant for him or his wife to spend more time in Canada. [ 30 ] Accordingly, I find that neither the Appellant nor his wife occupied the [NAME_9] as a primary residence. [ 31 ] For the reasons set out above, I dismiss the appeals, without costs. Signed this 26 th day of June 2026 “[NAME_4]” [NAME_4] J. CITATION: 2026 TCC 122 COURT FILE NOs.: 2024-2141(GST)I 2024-2145(GST)I STYLE OF CAUSE: [NAME_1] AND HIS [NAME_2] [NAME_3] OF HEARING: Montr é al, Qu é bec DATE OF HEARING: April 29, 2026

REASONS FOR

JUDGMENT BY: The [NAME_4] DATE OF

JUDGMENT: June 26 , 2026 APPEARANCES: Agent for the Appellant: [redacted] Counsel for the Respondent: [redacted] COUNSEL OF RECORD: For the Appellant: [redacted] N/A Firm: N/A For the Respondent: [redacted] Ottawa, Canada