1089391 Ontario – Tax Court of Canada denies relief where the taxpayer mistakenly applied for the new housing, rather than new rental property, HST rebate

The taxpayer, a private company, was credited with the new housing rebate, which was assigned by it to the vendor, on its purchase of a new residential condominium unit, notwithstanding that it purchased the unit only for rental purposes. CRA disallowed the new housing rebate and the principal of the taxpayer (the surviving widow of a murder that occurred after the purchase) did not become aware of the need to instead file a new rental property rebate claim until after the filing deadline (when the vendor belatedly informed her that the new housing rebate had been disallowed and sought to recover the amount that had been credited to the taxpayer on the purchase). In confirming CRA’s denial of the taxpayer’s late rental rebate application, Sommerfeldt J found that:

• he lacked jurisdiction to extend the filing deadline for the rental rebate application, as this was a discretion accorded instead to the Minister under ETA s. 281(1);
• the taxpayer could not use the offset mechanism under s. 296(2.1) or the s. 296(3.1) rebate mechanism because it had been assessed to deny the rebate under s. 297(1) rather than being assessed for net tax under s. 296(1); and.
• he could only suggest that this was an appropriate situation for a remission order.

Neal Armstrong. Summaries of 1089391 Ontario Inc. v. The Queen, 2020 TCC 129 under ETA s. 281(1), s. 296(2.1) and s. 296(3.1).