Elhav – Tax Court of Canada finds that the taxpayer’s son sleeping at the new condo for 2 ½ months satisfied the 1st-occupant test in ETA s. 254(2)(g), but not the intention for a primary place of residence under s. 254(2)(b)

The appellant and his wife agreed in January 2017 with a developer to purchase a still-to-be-constructed condominium unit. They took possession in June 2020 and began renting the unit out in September 2020.

Regarding the appellant’s new housing rebate claim, Friedlander, J. found that a qualifying relation, namely their son (Michael), age 23, had satisfied the first-occupancy test in ETA s. 254(2)(g) given that he had, in fact, slept every night in the condo unit until he decided to return to the family home in Vaughan about 2 ½ months later, and had furnished the unit (albeit, sparsely) while staying there. He was more than “merely ‘camping’” there.

However, the rebate nonetheless was not available because s. 254(2)(b) was not satisfied, i.e., Friedlander, J. doubted that their intention at the time of the purchase agreement was that Michael would use the unit as his primary place of residence. For instance, there was the significant distance between the family home in Vaughan (where Michael was staying until 2020) and the unit’s location in east Toronto, their close family ties, and the absence of any reason to consider that he would work near the condo (and, in fact, he ended up working in the Vaughan area).

Neal Armstrong. Summaries of Elhav v. The King, 2025 TCC 132 under ETA s. 254(2)(b) and s. 254(2)(g).