Hansen – Tax Court of Canada finds that CRA could not open up years where an individual annually purchased, occupied, improved and sold a home

An individual in the concrete pouring or foundation repair business sold five homes in succession over a six-year period after having occupied and improved them. D’Auray J found that the first three sales were statute-barred given that the taxpayer had relied on advice from his accountant that he was eligible for the principal residence exemption. For the two latter sales that were within the normal reassessment period, the gains were on income account given that he dealt with those houses “in a business-like way: he selected newly built homes that would be easier to sell, leveraged his construction industry experience to make improvements that would attract future buyers and picked homes in desirable markets.”

No gross negligence penalty was applicable, again, given his reliance on his accountant’s advice. D’Auray J also in passing noted the presumption in Mensah that the benefit of the doubt in s. 163(2) penalty matters should be given to the taxpayer.

Neal Armstrong. Summaries of Hansen v. The Queen, 2020 TCC 102 under s. 152(4)(a)(i), s. 9 – capital gain v. profit – real estate, and s. 163(2).