Lounsbury – Tax Court of Canada finds that substantial completion had occurred by the time of the interim occupancy certificate

The taxpayer and her husband built a house, which was near Lake Huron and a 2 ½ hour drive away from their Brampton rental apartment and full-time employment, doing a large portion of the work themselves on weekends, with the intention of retiring there. They moved into the home (on weekends) when they received the first occupancy certificate; and received a final occupancy permit 18 months later. She did not apply for the federal and Ontario new HST housing rebate until after a further 20 months, i.e., over three years after moving in.

Jorré DJ confirmed the denial of her rebate claims on two alternative grounds.

First, the application was not submitted within two years of the day of substantial completion, as required by s. 256(3)(a)(iii). He noted the relatively minor nature of the items to be completed after the first occupancy certificate was issued and that, in fact, they moved in then.

Second, the new house was not constructed for use as her primary place of residence, as required by s. 256(2)(a), as to which he stated:

On one hand, stated intention, changing addresses, location where the Appellant and her husband vote, the greater size of the house compared to the apartment are all indicia which favour the new house being the primary place of residence of the Appellant.

On the other hand, the apartment in Brampton is where the Appellant and her husband live during the greater part of the week and is much closer to the workplaces of the Appellant and her husband.

This … time spent in each location is very important and must be given great weight.

Neal Armstrong. Summary of Lounsbury v. The Queen, 2019 TCC 109 under ETA s. 256(3)(a)(iii) and s. 256(2)(a).