CRA indicates that it can be requested, before audit, to apply ETA s. 296(2.1) to substitute the residential rental rebate for an erroneously-claimed new housing rebate

A questioner suggested that Zdzieblowska seemed to indicate that a taxpayer who had claimed the new housing rebate (NHR) in error, but would have been eligible for the new residential rental property rebate (NRRPR), could advance a claim for the NRRPR pursuant to s. 296(2.1) past the normal two-year deadline, if done in the context of a reassessment denying the NHR – whereas if the taxpayer applied for the NRRPR past the normal deadline rather than waiting to be reassessed, the NRRPR would be denied because relief under s. 296(2.1) was available only for unclaimed rebates.

Without discussing Zdzieblowska or the subsequent Villa Ste-Rose decision, CRA indicated that, indeed, an NRRPR rebate application filed late in order to correct an erroneous NHR rebate claim could preclude it from providing relief. Instead, the claimant who wished to correct the erroneous NHR claim should request a reassessment of the initial NHR claim. After reviewing that adjustment request, CRA would generally offset the NRRPR amount, if determined to be available, against any amount owing from the NHR denial – even if its examination occurred beyond the two-year deadline for filing rebate claims.

Neal Armstrong. Summary of 2021 Alberta CPA Roundtable under “GST/HST New Housing and Rental Property Rebates” under ETA s. 296(2.1).