REASONS FOR JUDGMENT
Spiro J.
[1] The Appellant appeals an assessment by the Minister of National Revenue (the “Minister”) denying him a GST/HST New Housing Rebate for which he had applied under Part IX of the Excise Tax Act (the “ETA”). The amount of the rebate adjustment at issue is $27,258.15.
[2] The Appellant was the only witness at trial. The following chronology emerged from his evidence:
February 8, 2016 Joe Loureiro, the Appellant’s father, enters into an Agreement of Purchase and Sale for a condominium unit to be built at 278 Buchanan Drive, Unit 505E, Markham, Ontario (the “Markham Condominium”
).[1] Initial anticipated occupancy date is specified as August 31, 2018. Latest anticipated occupancy date is specified as November 30, 2021.[2] The Appellant’s father tells the Appellant that he is holding the Markham Condominium for him in trust. Purchase price is $360,990.
June 17, 2017 Appellant and Ruth Alexandra Daugherty Granados (“Ruth”) are engaged.
[No evidence of date] Appellant is informed that the anticipated occupancy date for the Markham Condominium has been deferred.
August 23, 2019 Appellant and Ruth are married. Appellant and Ruth move into Ruth’s mother’s home.
October 15, 2019 Appellant is informed that the anticipated occupancy date for the Markham Condominium has been deferred to June 29, 2020.[3]
October 26, 2019 Appellant and Ruth enter into Agreement of Purchase and Sale for a townhouse to be built on Lageer Drive, Stouffville, Ontario (the “Stouffville Townhome”
). Initial anticipated closing date is specified as December 9, 2020. Latest anticipated closing date is specified as April 8, 2022. Purchase price is $644,990.[4]
November 19, 2019 Appellant and Ruth execute an Amendment to Agreement of Purchase and Sale of the Markham Condominium.[5] By virtue of the Amendment, both appear on title for the first time.[6]
June 29, 2020 The Markham Condominium is ready for occupancy. The Appellant and Ruth move out of Ruth’s mother’s home and into the Markham Condominium.
October 15, 2020 Purchase of the Markham Condominium closes.[7]
December 3, 2020 Appellant applies for GST/HST New Housing Rebate for the Markham Condominium.[8] That is the rebate at issue in this appeal.
December 13, 2020 Appellant and Ruth list the Markham Condominium for $499,000.[9]
December 14, 2020 Appellant and Ruth sell the Markham Condominium for $565,000.[10]
January 30, 2021 Appellant and Ruth move out of the Markham Condominium and into Ruth’s mother’s home.
February 1, 2021 Sale of the Markham Condominium closes.
February 4, 2021 Purchase of the Stouffville Townhome closes. Appellant and Ruth move out of Ruth’s mother’s home and into the Stouffville Townhome where they currently reside.
April 9, 2021 Ruth applies for GST/HST New Housing Rebate for the Stouffville Townhome.[11] That rebate is not at issue in this appeal.
[3] One of the requirements for the GST/HST New Housing Rebate is found in paragraph 254(2)(b) of the ETA. That is the only provision at issue in this appeal.
[4] Paragraph 254(2)(b) of the ETA provides:
at the time the particular individual becomes liable or assumes liability under an agreement of purchase and sale of the complex or unit entered into between the builder and the particular individual, the particular individual is acquiring the complex or unit for use as the primary place of residence of the particular individual or a relation of the particular individual,
[5] In order for the Appellant to succeed in this appeal, that provision requires the Appellant and Ruth, when they assumed liability under the Agreement of Purchase and Sale for the Markham Condominium on November 19, 2019, to have acquired it “for use as the primary place of residence”
of both of them.[12] That was the Appellant’s position.[13] When evaluating the Appellant’s position in context, it is important to review what transpired some 24 days earlier on October 26, 2019.
[6] On October 26, 2019, the Appellant and Ruth chose to assume liability under an Agreement of Purchase and Sale for the Stouffville Townhome. In light of that fact, beginning on October 26, 2019, the Appellant and Ruth no longer regarded the Markham Condominium as their future home. With only one bedroom and a den, they were of the view that the Markham Condominium would have been too small for the growing family they hoped to raise.[14]
[7] The facts lead inexorably to the conclusion that the Stouffville Townhome replaced the Markham Condominium as the intended primary place of residence of the Appellant and Ruth from October 26, 2019 onward.
[8] I find that on the date on which the Appellant and Ruth assumed liability under the Agreement of Purchase and Sale for the Stouffville Townhome – October 26, 2019 – they acquired it “for use as the primary place of residence”
of the two of them.
[9] Counsel for the Appellant contended that when the Appellant and Ruth assumed liability under the Agreement of Purchase and Sale for the Markham Condominium 24 days later on November 19, 2019 they intended it “for use as the primary place of residence”
of the two of them. I do not agree.
[10] Parliament chose to use the phrase “the primary place of residence”
. If we take the word “the” seriously, it means that only one place of residence at a time can be intended as one’s “primary place of residence”.
[11] By the time the Appellant and Ruth appeared on title to the Markham Condominium on November 19, 2019, each of them had formed the intention that the Markham Condominium would be used as their interim place of residence until the Stouffville Townhome was ready.[15] As my colleague, Justice Smith, observed in Kniazev v The Queen, 2019 TCC 58:
[8] Parliament’s use of the word “primary” also suggests that the purchaser must have a settled intention to centre or arrange his personal and family affairs around that property. The rebate is not intended for a secondary residence or “pied‑à‑terre”. An individual can own multiple residences but would typically have only one “primary place of residence”.
[12] Counsel for the Appellant also advanced a frustration argument on the basis that the Appellant and Ruth were frustrated by several deferrals of the anticipated occupancy date of the Markham Condominium. But, in this context, frustration means something quite different – a subsequent event beyond the control of the Appellant and Ruth that prevented the anticipated move into their intended primary place of residence. Here, nothing prevented the Appellant and Ruth from moving into the Markham Condominium. The only reason the Markham Condominium was not intended to be their primary place of residence is that they had chosen to purchase their primary place of residence – the Stouffville Townhome – some 24 days earlier.
[13] For all of these reasons, I conclude that the Appellant is not entitled to the GST New Housing Rebate under Part IX of the ETA in respect of the Markham Condominium.[16]
[14] The Appellant’s appeal is dismissed without costs.
Signed at Toronto, Ontario, this 28th day of August 2024.
“David E. Spiro”
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