Docket: 2007-1560(GST)I
BETWEEN:
FRANCE CAMIRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
____________________________________________________________________
Appeal heard
on January 17, 2008, at Montréal,
Quebec.
Before: The Honourable
Justice Lucie Lamarre
Appearances:
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For the Appellant:
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The Appellant herself
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Counsel for the Respondent:
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Maryse Nadeau Poissant
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____________________________________________________________________
JUDGMENT
The appeal from the assessment
made under Part IX of the Excise Tax Act, notice of which is dated
August 11, 2006, and bears the number 0605800212396001, is dismissed.
Signed at Ottawa, Canada, this 8th day of February 2008.
"Lucie Lamarre"
Translation certified
true
on this 19th day
of March 2008.
Brian McCordick,
Translator
Citation: 2008TCC82
Date: 20080208
Docket: 2007-1560(GST)I
BETWEEN:
FRANCE
CAMIRÉ,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
[OFFICIAL ENGLISH
TRANSLATION]
REASONS FOR JUDGMENT
Lamarre J.
[1] The Appellant is
appealing from a decision made by Revenu Québec as part of its mandate to
administer the Goods and Services Tax (GST). The decision denied the Appellant
a GST rebate claim in the amount of $1,157.98 in respect of a new or
substantially renovated home. According to Revenu Québec, the condition contemplated
in paragraph 256(2)(a) of the Excise Tax Act, R.S.C. 1985,
c. E‑15, ("the ETA") was not met.
[2] Paragraph 256(2)(a) of the ETA reads:
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Rebate for owner-built homes
(2) 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,
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Remboursement —habitation
construite par soi-même
(2) Le ministre verse un
remboursement à un particulier dans le cas où, à la fois :
a) le particulier, lui-même ou par un
intermédiaire, construit un immeuble d’habitation — immeuble d’habitation à
logement unique ou logement en copropriété — ou y fait des rénovations
majeures, pour qu’il lui serve de résidence habituelle ou serve ainsi à son
proche;
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[3] The phrase
"substantial renovations" is defined in subsection 123(1) of the
ETA as follows:
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"substantial renovation" of a residential complex means the
renovation or alteration of a building to such an extent that all or
substantially all of the building that existed immediately before the
renovation or alteration was begun, other than the foundation, external
walls, interior supporting walls, floors, roof and staircases, has been
removed or replaced where, after completion of the renovation or alteration,
the building is, or forms part of, a residential complex;
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« rénovations majeures » Fait l’objet de rénovations
majeures le bâtiment qui est rénové ou transformé au point où la totalité, ou
presque, du bâtiment qui existait immédiatement avant les travaux, exception
faite des fondations, des murs extérieurs, des murs intérieurs de soutien,
des planchers, du toit et des escaliers, a été enlevée ou remplacée, dans le
cas où, après l’achèvement des travaux, le bâtiment constitue un immeuble
d’habitation ou fait partie d’un tel immeuble;
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[4] A residential
complex is also defined in subsection 123(1) of the ETA.
The definition reads, in relevant part:
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"residential
complex" means
(a) that part of
a building in which one or more residential units are located, together with
(i) that part of any
common areas and other appurtenances to the building and the land immediately
contiguous to the building that is reasonably necessary for the use and enjoyment
of the building as a place of residence for individuals, and
(ii) that proportion of
the land subjacent to the building that that part of the building is of the
whole building,
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« immeuble
d’habitation »
a) La partie constitutive d’un bâtiment
qui comporte au moins une habitation, y compris :
(i) la fraction des
parties communes et des dépendances et du fonds contigu au bâtiment qui est
raisonnablement nécessaire à l’usage résidentiel du bâtiment,
(ii) la proportion du
fonds sous-jacent au bâtiment correspondant au rapport entre cette partie
constitutive et l’ensemble du bâtiment;
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. . .
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. . .
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(c)
the whole of a building described in paragraph (a), or the whole of a
premises described in subparagraph (b)(i), that is owned by or has
been supplied by way of sale to an individual and that is used primarily as a
place of residence of the individual, an individual related to the individual
or a former spouse or common-law partner of the individual, together with
(i) in
the case of a building described in paragraph (a), any appurtenances to the
building, the land subjacent to the building and that part of the land
immediately contiguous to the building, that are reasonably necessary for the
use and enjoyment of the building, and
(ii)
in the case of a premises described in subparagraph (b)(i), that part
of any common areas and other appurtenances to the building and the land
subjacent or immediately contiguous to the building that is attributable to
the unit and that is reasonably necessary for the use and enjoyment of the
unit;
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c) la totalité du bâtiment visé à
l’alinéa a) ou du local visé au sous-alinéa b)(i), qui est la
propriété d’un particulier, ou qui lui a été fourni par vente, et qui sert
principalement de résidence au particulier, à son ex-époux ou ancien conjoint
de fait ou à un particulier lié à ce particulier, y compris :
(i)
dans le cas d’un bâtiment visé à l’alinéa a), les dépendances, le
fonds sous-jacent et la partie du fonds contigu qui sont raisonnablement
nécessaires à l’usage du bâtiment,
(ii)
dans le cas d’un local visé au sous-alinéa b)(i), la fraction des
parties communes et des dépendances du bâtiment, et du fonds sous-jacent ou
contigu à celui-ci, qui est attribuable à l’immeuble et raisonnablement
nécessaire à son usage;
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[5] According to Revenu
Québec, the residential complex in respect of which the Appellant claimed a
rebate did not undergo substantial renovations within the meaning of the ETA. That is the crux of
this dispute. In her Notice of Objection (Exhibit I‑1), the Appellant
stated that she did several kinds of work on the house in order to be able to
live in it. In her submission, the work was not done on a whim; rather, it was
truly needed. For example, the work included a 12' x 30' extension (including
a roof) in which she added two bedrooms; and an uncovered 12' x 30'
patio. Based on the extension and the patio, she is of the opinion that there
was a 24' x 30' addition to the house, doubling the initial size of the house.
She says that the walls of the old part were either demolished or redone. The
existing doorways had to be enlarged in order to install [TRANSLATION] "solid
pine doors". Closets were added.
[5] In her Notice of
Appeal, she added that she re-covered the roof using shingles. She testified
that she purchased this lakeside cottage for $84,000 following a separation.
She obtained $100,000 in financing, and spent $80,000 of it on renovations. She
transformed a summer cottage into a winter home. For example, she brought
in a 240-volt service line to replace the existing 120-volt line. The bathroom
was totally redone with new plumbing fixtures.
[6] In addition to the
electrical wiring for the bathroom and the two new bedrooms, she had a
1250-watt baseboard heater and three other electrical outlets installed, and
made a few modifications to the existing wiring. The flooring was completely
redone. The kitchen cabinets were resurfaced. All the windows were
changed. She put thermostats everywhere in order to control the temperature in
every room.
[7] She also claims to
have redone all the plumbing. However, the plumbing bill shows an addition of
14 feet of pipe, which would only represent the piping for the bathroom. The
documentary evidence does not establish that plumbing in any other room was
modified. The Appellant was unable to confirm this point. The insulation
was completely redone from the outside. The wall covering was also redone. The
house prior to the addition of the extension was 24' x 30' according to the
plan.
[8] The Appellant can
qualify for the tax rebate for substantial renovations if she shows that all or
substantially all of the building that existed immediately before the
renovation or alteration was begun has been removed or replaced. An addition to
the house is not part of the building that existed and cannot be considered
unless the addition is so large in relation to the existing building that the existing
building effectively becomes the "add-on" (see Erickson v. The
Queen, 2001 GTC 309). In such situations, the resulting structure is
considered a new residential complex (see Bulletin B‑092, Substantial
Renovations and the GST/HST New Housing Rebate, dated
January 6, 2005, and corrected January 31, 2007, under
"Major additions" ("Bulletin B‑092").
[9] Here, the extension
housing the two bedrooms is 12' x 30'. The pre-existing building was 24' x 30'.
In my opinion, the patio cannot be taken into account for the additions because
it is not part of what is reasonable necessary to the residential use of the
building within the definition of "residential complex" in
subsection 123(1) of the ETA. Bulletin B‑092 states, under
"Eric L.": "To be considered a newly constructed residential
complex, the addition must at least double the size of the habitable area of
the existing residence." The Bulletin states that an added garage does not
count because it is not considered a "habitable" area. Similarly, I
would say that a patio is not a habitable area. In my opinion, the Bulletin is
not mistaken on this point, considering the definition of "residential complex",
which refers specifically to the residential use of the building.
[10] Thus, excluding the
patio, the addition did not double the habitable area; rather, it was accessory
to the pre-existing building. Thus, this was not a newly constructed
residential complex.
[11] As for whether there
were "substantial renovations", the definition strangely excludes
work on the foundation, external walls, interior bearing walls, floors, roof
and staircases. One must consider whether the other work done on the pre‑existing
building was sufficient for one to say that the building was renovated or
transformed to such an extent that all or substantially all of the building has
been removed or replaced. Here, only the bathroom was completely redone.
The kitchen was not redone; only the cabinets were resurfaced, and they
were not actually replaced. The electrical amperage was changed, but only a few
modifications were made to the existing wiring. The plumbing was redone only in
the bathroom. The doors and windows were replaced, and closets were added.
In my opinion, this is still not sufficient for it to be considered that
all or substantially all of the building was renovated or replaced. Indeed, the
pre-existing portion was not largely removed or replaced. The rebate sought is
very restrictive. The terms used in the ETA prove this, because they exclude
work which, in theory, would be considered major. The cost of the work is
not the deciding factor (see McLean v. The Queen, 98 GTC
2137). Unfortunately, the Appellant's claim cannot be allowed.
[12] The appeal is
dismissed.
Signed at Ottawa, Canada, this 8th day of February 2008.
"Lucie Lamarre"
Translation
certified true
on this 19th day
of March 2008.
Brian McCordick,
Translator
CITATION: 2008TCC82
COURT FILE NO.: 2007-1560(GST)I
STYLE OF CAUSE: FRANCE CAMIRÉ v. HER MAJESTY THE QUEEN
PLACE OF HEARING: Montréal,
Quebec
DATE OF HEARING: January 17, 2008
REASONS FOR
JUDGMENT BY: The Honourable Justice Lucie Lamarre
DATE OF JUDGMENT: February
8, 2008
APPEARANCES:
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For the
Appellant:
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The Appellant herself
|
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Counsel for the Respondent:
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Maryse Nadeau
Poissant
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COUNSEL OF RECORD:
For the
Appellant:
Name:
Firm:
For the
Respondent: John H. Sims, Q.C.
Deputy
Attorney General of Canada
Ottawa, Canada
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