Wall – Federal Court of Appeal confirms that three successive sales of newly-constructed homes over a period of under 5 years were made in the course of a business or adventures
The taxpayer purchased three homes in Vancouver in succession between 2004 and 2009, demolished each one, constructed a new house and sold it less than two years after the purchase date. His position was that he had not sold in the course of a business or an adventure in the nature of trade, but had instead constructed each home for the purpose of personal occupancy, so that his sales were exempt under Sched. V, Pt. I, s. 2 rather than being taxable supplies for GST purposes made as a builder.
In dismissing the appeal, Webb JA noted:
[W]ith the guidance of the Supreme Court of Canada [in MacDonald], Mr. Wall’s “ex-post facto testimony regarding his intentions cannot overwhelm the manifestations of a different purpose objectively ascertainable from the record”. …
Evidence contradicting the taxpayer’s arguments included:
- Each house was listed for sale before the occupancy permit was obtained.
- His incurring more debt with each successive purchase contradicted his testimony that he sold to eliminate debt.
- The maximum period that he could have occupied each property before its sale (even assuming he moved in before obtaining the occupancy permit) was a matter of months rather than years.