Gaitanis – Tax Court of Canada finds that there could be no frustration of a qualifying purchase intent if the taxpayer never had that intent

In 2014, the appellant became a co-purchaser with his niece of a single-unit residential complex (the “property”) in order to assist with the financing of its purchase.

By virtue of the then-current version of ETA s. 262(3), each of them was required to satisfy the s. 254(2)(b) requirement of acquiring the property as a place of residence of that individual or a relation, in order to generate the $24,000 Ontario new housing rebate. The appellant did not satisfy this test since, at the time of entering into the purchase agreement, his intent was for the property to be acquired as the primary place of residence of his niece and not of him, and she was not a relation. She was not a relation because inter alia ITA s. 251(6)(a) stated that persons are connected by blood relationship if one is the child or other descendant of the other or one is the brother or sister of the other.

Bodie J rejected a submission of the appellant that a frustrating event excused his failure to comply with s. 254(2)(b), namely that they were unable to arrange permanent mortgage financing of the property and, accordingly, were forced to sell the property before they occupied it: there could not be considered to have been frustration of an intent of the appellant to acquire the property as a primary place of residence of him or a relation because he did not have such requisite intent at the time of signing the purchase agreement.

Neal Armstrong. Summary of Gaitanis v. The King, 2025 TCC 186 under ETA s. 254(2)(b).