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Subject:
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GST New Housing Rebates
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This is in response to a query you have raised regarding the Goods and Services Tax (the "GST") new housing rebate under section 256 of the Excise Tax Act (the "Act"). We apologize for the delay in responding.
Statement of Facts
1. An individual begins construction of a house in autumn during which time he resides in a trailer situated on the lot.
2. In January, due to cold weather, the individual occupies the basement of the house.
3. The house has no running water, bathroom facilities or furnace generated heat. Heat is generated from a propane stove.
Interpretation Requested
Does the physical relocation into the basement of the house at this point constitute "... the day the complex is first occupied ..." for purposes of paragraph 256(3)(a) of the Act? If no, what guidelines should be followed to determine the day the complex is first occupied?
Interpretation Given
Provided the house is a single unit residential complex, the house would be considered to be occupied for purposes of paragraph 256(3)(a) of the Act at the time of physical relocation into the basement if the individual can be considered to be dwelling or residing there on a permanent or long term basis. As the house would not be considered to be substantially completed, the two year limit to file the GST new housing rebate claim would commence from the day the house is first occupied (i.e. the day the particular individual moved into the basement).
We would note that the term occupy, or occupied, is not defined for purposes of the Act. As such, the Department's interpretation of the word should be the grammatical and ordinary sense of the word. The Concise Oxford Dictionary defines the term occupy to mean, "... reside, be tenant of; ...". The Houghton Mifflin Canadian Dictionary of the English Language defines the term to mean, " To dwell or reside in; be a tenant of." Normally, in keeping with the meaning of the words dwell and reside, the Department should expect the occupancy to be permanent or long term in nature. Therefore, if a particular fact situation indicates that an individual is residing in or dwelling in a house that is a single unit residential complex, that house can be considered to be occupied for GST new housing rebate purposes.
Where an individual moves into a partially constructed house on temporary basis, that house would not normally be considered to have been occupied. For example, based on the fact scenario outlined above, if the individual only resided in the basement of the house for a brief period of time before returning to live in the trailer when the weather improved, the Department would not view that house to be occupied.
The Department does not require that municipal statutes (e.g. statutes governing occupancy permits) be referenced when attempting to determine whether a newly constructed house has, or has not, been occupied. Where an individual is residing in a newly constructed house for which an occupancy permit subject to municipal statute has not been granted, the Department may still consider such a house, based on the particular fact situation, to be occupied. We would advise, however, that the granting of an occupancy permit by a municipality may prove helpful in attempting to determine whether or not a house can be considered to be substantially completed.
Should you have questions on any of the above or require further clarification, please contact John Bain at 954-8852.
J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
11870-5, 11950-1
c.n. 2329(JB)
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