Words and Phrases - "ordinarily inhabited"

The two taxpayers, who were work colleagues and joint renters of a Montreal apartment, acquired a house on Mount Royal in a dilapidated condition for a price of $695,000 from the executors of an estate (who sold without any representations made as to the condition of the property), spent $350,000 on having substantial renovations made, and put the property up for sale seven months after its acquisition at a price of $1,250,000, which resulted in its sale at that price two months later. They did not report their gain, and the ARQ assessed on the basis that their gain was on capital account but was not eligible for the principal residence exemption. They had never moved into the property, had any meals there, moved any of their personal effects there or changed their address with government authorities to that address.

In finding that the taxpayers had not “inhabited” (let alone “ordinarily inhabited”) the property, so that the principal residence exemption was not available, Edwards JCQ noted that the taxpayers had not pleaded that they had “inhabited” the property but rather that they had "occupied" it by reason of their supervision of (and, in the case of one of the taxpayers, his participation in) the renovation work, noted (at para. 43) that the applicable test was of “inhabiting,” and stated (at para. 52, TaxInterpretations translation) that the word “inhabit” “does not include the intention to inhabit a place, but is limited to in fact inhabiting there.”

In any event, even an intention to inhabit was not established.

He also quoted with approval the statement in Rebus, at para. 23 that:

[T]he words "ordinarily inhabit" mean "normally occupy as a home".