[OFFICIAL ENGLISH TRANSLATION]
Date: 20020712
Docket: 2001-1955(GST)I
BETWEEN:
GUY BOUCHER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Lamarre, J.T.C.C.
[1] This is an appeal from an
assessment made under the Excise Tax Act
("Act") by which the Minister of National
Revenue ("Minister") denied the appellant a goods and
services tax ("GST") new housing rebate of $2,099.62 on
the ground that one of the conditions imposed by
subsection 256(2) of the Act had not been met.
[2] The relevant parts of
subsection 256(2) of the Act read as follows:
256(2) Rebate for owner-built homes - Where
(a) a particular individual constructs or substantially
renovates, or engages another person to construct or
substantially renovate for the particular individual, a
residential complex that is a single unit residential complex or
a residential condominium unit for use as the primary place of
residence of the particular individual or a relation of the
particular individual,
. . .
the Minister shall, subject to subsection (3), pay a
rebate to the particular individual . . . .
[3] In making the assessment, the
Minister relied on the facts found in subparagraphs 4(b)
et seq. of the Reply to the Notice of Appeal, which
read as follows:
[TRANSLATION]
(b) the Appellant was not a registrant during the
period at issue;
(c) the Appellant is claiming a new housing
tax (GST) rebate to which he is not entitled for the following
reasons:
(i) all of the
Appellant's official addresses are in the Montréal
area, that is, 90 Rue Lacaille in St-Constant,
Quebec J5A 1B2;
(ii) in 1998, the Appellant had a
residence or house constructed at 1102 Chester in
Val-Bélair, Quebec, on land he had purchased in
1996;
(iii) the Appellant worked as a police
officer in the Montréal area before, during and after the
period at issue;
(iv) the Appellant lived with his
spouse and children at 90 Rue Lacaille in
St-Constant before, during and after the period at
issue;
(v) the house in respect of which the
rebate was applied for is not the primary place of residence of
the Appellant or his relations;
(vi) the Val-Bélair residence
in respect of which the new housing tax (GST) rebate was applied
for is not and has never been inhabited by the Appellant's
relations, that is, his spouse and children, as their primary
place of residence, and this was the case before, during and
after the period at issue;
(vii) the Appellant sold the
Val-Bélair house on or about
October 16, 2000, without having used it as his primary
place of residence;
(viii) the Appellant's children attended school in
the Montréal area and not in Val-Bélair,
which is in the Québec area;
(ix) the Appellant's wife attended the
Université de Montréal and subsequently found a job
in the Montréal area during the period at issue;
(x) for insurance policy purposes,
the Val-Bélair property was considered a secondary
residence;
(xi) the Appellant's situation is not
one for which a new housing rebate can be accepted by the
respondent since the condition in section 256(2) of the
Excise Tax Act (R.S.C. 1985, c. E-15)
providing that the newly constructed single unit residential
complex be used as the primary place of residence of the
particular individual or a relation of the particular individual
was not met;
(xii) the Minister states that the Appellant
cannot claim, and is unrightfully claiming, a new housing rebate
of $2,099.62 for the period of June 2000;
[4] The appellant admitted that he
lived in St-Constant in the Montréal area with his
family until classes were over at the end of June 2000. At
that time, they moved some of their furniture into the newly
constructed residence in Val-Bélair in the
Québec area, and the appellant's wife moved into that
residence with the children. She had just completed a Bachelor of
Education at the Université de Montréal and was
looking for a job for the beginning of the new school year in the
fall of 2000. She made job applications in Québec and
Montréal. She did what was needed to enrol her children in
schools in Québec. They could not be enrolled in
June 2000 because of documents that were missing.
[5] The appellant's wife was not
offered a job during the summer. It was not until
September 2000 that she received a job offer from a school
board in Montréal, which she finally accepted near the end
of that month. She still works for that school board.
[6] It was in September 2000 that
the appellant and his wife decided to put the
Val-Bélair house up for sale. It was sold in
October 2000.
[7] The appellant also said that he is
a police officer in Montréal and that he had no intention
of leaving that job. He and his wife, who are both Québec
natives, had moved to Montréal because of his job. They
have been living in St-Constant ever since. His wife took a
four-year program at the Université de
Montréal, and they enrolled their children in school in
Montréal. However, they always intended to return to
Québec. During the last year his wife was in university,
that is, the 1999-2000 school year, they offered the
St-Constant house for sale in the hope of going to live in
Québec at the end of the school year. The appellant talked
to his employer to obtain a compressed work schedule over three
or four days so that he could spend more time with his family in
Québec. However, since his wife did not get a job in
Québec, they gave up the idea of going to live there in
September 2000 and took their St-Constant house off
the market.
[8] It is also worth mentioning that
the appellant had already offered the Val-Bélair
house in the Québec area (construction of which was not
completed until early 2000) for sale in the fall of 1999, at the
same time as the St-Constant house. By selling the two
houses, they hoped to get the money they needed to build a larger
house in Québec. However, neither of the two houses was
sold at that time. They took the Val-Bélair house
off the market so they could move into it when classes ended in
June 2000. They left the St-Constant house on the
market. As I mentioned earlier, since that house had not yet been
sold in September 2000, and in view of the circumstances,
they took it off the market and put the Val-Bélair
house up for sale once again. It was sold in
October 2000.
[9] It is also worth pointing out that
the appellant added two rooms to the Val-Bélair
house during the summer of 2000 to make it more suitable for
their needs. The appellant also said that there was no telephone
in the house because they used a cellular telephone.
[10] Moreover, the appellant explained that
the insurance company had considered the St-Constant house
their principal residence because it was not possible to have two
principal residences on an insurance policy. However, he did not
pay the high premium applicable to cottages on the
Val-Bélair house in the Québec area; instead,
he paid the premium applicable to a principal residence. It was
because of his job that he used the St-Constant address in
his correspondence. However, his wife used her address in
Val-Bélair as her mailing address after she moved in
June 2000.
[11] The only issue is whether the appellant
constructed the Val-Bélair residence for use as his
primary place of residence, as required by
paragraph 256(2)(a) of the Act.
[12] In Burrows v. Canada, [1998]
T.C.J. No. 606 (Q.L.), to which I was referred by counsel for the
respondent, Judge Hamlyn reiterated the Minister's
position on what constitutes a primary place of residence as
follows in paragraphs 13-14:
¶ 13 The
Minister's position on the meaning of "primary place of
residence" is found in GST Memorandum 500-4-5, Housing and
Other Property Rebates in which it states:
"primary place of residence" means a residential unit,
owned jointly or otherwise, which is intended to be inhabited by
an individual on a permanent basis. Only one residence may be a
person's primary residence. For rebate purposes, if a person
has more than one place of residence, the following factors are
taken into consideration to determine if the residence qualifies
as the primary residence: whether the individual intends to use
the home as his or her primary residence, the length of time the
premises are inhabited, and the designation of that address on
personal records.
¶ 14 The
Minister's Policy Paper P-130 entitled Place of residence,
elaborates upon the Minister's position on the meaning of the
term "primary place of residence". The Policy Paper
points out that while a person may have more than one place of
residence, he may only have one "primary place of
residence". When determining the primary place of residence,
the Paper indicates that consideration should be given to the
purpose of the stay, the amount of time of the stay and the
physical presence at the residence.
[13] The evidence shows that the appellant
and his wife constructed the Val-Bélair residence
with the intention of moving into it. The appellant certainly
stated that he would not have built it otherwise. This is also
shown by the fact that the St-Constant house was put up for
sale for almost a year starting in the fall of 1999, that is,
shortly before the construction work on the
Val-Bélair residence ended in early 2000.
[14] In Bérubé v. The
Queen, T.C.C., No. 1999-215 (GST)I, July 6, 2000
(2000 GTC 868), the criteria indicative of a primary place of
residence found in Policy Statement P-228 issued on
March 30, 1999, were reiterated. Those criteria are
found, inter alia, in paragraph 5, which
states:
Criteria Indicative of a Primary Place of Residence
. . .
5. Where the individual owned or leased another place of
residence at the time the residential complex or co-op share in
question was acquired, constructed or substantially renovated,
the disposition of that place of residence or clear evidence that
that place of residence is offered for sale or rental at or
before the occupation of the complex or residential unit may
indicate that the complex or unit is the individual's
primary place of residence.
[15] I acknowledge that we have only the
appellant's testimony to show that the St-Constant
residence was offered for sale. However, this was not questioned
by the respondent on cross-examination, and I have no
reason to doubt the appellant's credibility.
[16] Moreover, it is true that the fact that
the appellant offered the Val-Bélair residence for
sale as early as the fall of 1999 may cast doubt on the intention
of the appellant and his family to move into that particular
residence, which the appellant said was a little small for his
needs. However, the evidence shows that they moved into the house
in June 2000 with the intention of remaining there since
they added two bedrooms to the house and since it already had
three bathrooms.
[17] As for the length of time the appellant
and his family inhabited the Val-Bélair house, it is
clear that the reason they moved at the end of the 2000 school
year was that the appellant's wife was finishing her studies
at the Université de Montréal and her own children
were also in school in Montréal. It is understandable that
the family was unable to move earlier. Moreover, it is clear that
the family inhabited the Val-Bélair residence on a
permanent basis as its primary place of residence during the
period from June to September 2000. It was only the
circumstances surrounding the new job obtained by the
appellant's wife, which were not known until
September 2000, that forced them to move back to
Montréal.
[18] I do not think it can be said that the
Val-Bélair residence was a secondary residence.
Moreover, it was offered for sale in September 2000, as soon
as the appellant found out that his wife would not have a job in
Québec. In my opinion, if his wife had found a job in
Québec in September 2000, the respondent would not
have contested the new housing tax (GST) rebate. The fact that
his wife's efforts were unsuccessful in the Québec
area does not change the purpose for which the
Val-Bélair residence was constructed.
[19] For these reasons, it is my opinion
that the appellant meets the conditions provided for in
subsection 256(2) of the Act, specifically the
condition requiring him to have constructed the
Val-Bélair residence for use as the primary place of
residence of him and his family. Since this was the only issue, I
am of the opinion that the appeal should be allowed.
Signed at Ottawa, Canada, this 12th day of July 2002.
J.T.C.C.
Translation certified true
on this 17th day of October 2003.
Sophie Debbané, Revisor
Email this Content