Sindhi – Tax Court of Canada finds that a residence was not “occupied” notwithstanding weekly overnight stays

The appellant agreed in July 2016 to purchase a new home for $413,847, but by the time of the closing in March 2018, he had lost his source of employment income and broken up with his partner. He nonetheless closed with financial assistance from his parents and from a private mortgage. He did not consume any meals at the residence, and only stayed there for approximately two nights per week. The only housekeeping items on the premises were a mattress, sheets and pillows and a table. He eventually sold the residence for $455,000.

Rossiter CJ found that, although the appellant satisfied the requirement under s. 254(2)(b) of the GST/HST new housing rebate rules that, at the time of agreeing to purchase, he had intended to occupy the residence as his primary place of residence, he had not satisfied the requirement under s. 254(2)(g) that he had in fact occupied the residence as a place of residence, stating:

[O]ccupancy is something more than simply having a mattress with a set of sheets and pillowcases and a table on the premises. Although the Appellant did some measure of staying at the premises in question, two nights per week, this certainly could not classify one as occupying the premises.

Rossiter CJ went on to note that the appellant continued to live most of his time with his parents, where he kept most of his personal effects and mailing address. He accepted the “frustrating event” doctrine, but stated:

To invoke frustration, the surrounding circumstances must make the frustrating event unforeseeable, beyond the buyer’s control, and deny the buyer any alternative pathway to having the property be their primary residence … .

That test was not satisfied here.

Before denying the rebate on the above grounds, Rossiter CJ, rejected the Crown’s argument that s. 254(2)(g) required the appellant to have occupied the property as his “primary place of residence” given the telling contrast between the wording of s. 254(b) (referring to a “primary place of residence”) and s. 254(g) (referring only to a “place of residence”.)

Neal Armstrong. Summaries of Sindhi v. The King, 2023 TCC 102 (Informal Procedure) under ETA s. 254(2)(g) and Statutory Interpretation – Consistency.