Words and Phrases - "substantially completed"
Morgan v. The King, 2025 TCC 36 (Informal Procedure)
Whether the taxpayer had timely filed his application for the Ontario component of the new housing rebate pursuant to s. 256.21(1) for the home of him and his spouse turned on when the substantial renovation of that home was substantially completed (which started the running pursuant to s. 46(6) of the New Harmonized Value Added Tax System Regulations of the two year period for filing the application) and on when the application was filed.
CRA considered that the substantial completion date was January 13, 2020, being the date that the local town conducted its final inspection of the property. The taxpayer argued for January 25, 2000 (the date on which the couple moved back into the home), pointing to the resumption of phone and gas services on that date, and the installation of a concrete driveway pad over six months later. In concluding in favour of the Crown’s position, Yuan J noted (at para. 18) that “the nature of the work completed after January 13, 2020 was not critical to occupancy of the Property.”
However, he went on to find that the taxpayer’s application had been filed within two years of this substantial completion date.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Regulations - New Harmonized Value-Added Tax System Regulations, No. 2 - Section 46 - Subsection 46(6) - Paragraph 46(6)(a) | evidence of taxpayer’s accountant accepted as to when she mailed the rebate application | 365 |
| Tax Topics - Excise Tax Act - Section 334 - Subsection 334(1) | application was mailed about a month before it was stamped as received by the CRA mailroom | 259 |
| Tax Topics - Income Tax Act - Section 248 - Subsection 248(7) - Paragraph 248(7)(a) | CRA presumption that application was mailed no more than 5 business days before stamped as received by CRA mailroom, was rejected | 63 |
9158-9853 Québec Inc. v. Agence du revenu du Québec, 2022 QCCQ 9851
The appellant (“9158”), which had constructed a 14-storey apartment building, with two floors of commercial space and with underground parking, self-assessed itself under QSTA s. 225 (similar to ETA s. 191(3)) on the basis that there had been a self-supply on the residential component of the building on October 31, 2015 based on a fair market value of $11.1 million. The ARQ disputed this value, and assessed on the basis that there was a self-supply on that date based on an FMV of $15.3 million. 9158 then took the position that the time of the self-supply was on June 1, 2015, when 90% of the construction costs had been incurred, so that at that point (which was in an earlier reporting period that was now statute-barred) the building had reached substantial completion (and, presumably, the first unit had already been occupied).
In accepting a report of the ARQ valuator and before dismissing 9158’s appeal, Lareau JCQ stated (at paras. 37, 40, TaxInterpretations translation):
Mr. Vadnais' report, which contains a multitude of photographs, taken on August 5, 2015 … clearly indicates that 35 out of 88 units were not ready for rental. … The report also indicates that a significant portion of the underground parking garage was used to store materials and equipment such as, for example, bathroom vanities, kitchen countertops and equipment, etc. …
Although the rule of thumb of 90% of the costs incurred may be appropriate in the vast majority of cases, for formulating, without further effort, an equivalence between a specific percentage of costs incurred and the concept of a "substantially completed" building, this does not seem justified under these circumstances.
Lounsbury v. The Queen, 2019 TCC 109 (Informal Procedure)
The taxpayer and her husband built a house, which was near Lake Huron and a 2 ½ hour drive from their Brampton rental apartment and full-time employment, doing a large portion of the work themselves on weekends beginning in 2008, with the intention to retire there. The municipality issued a first occupancy certificate on March 14, 2014, which noted various minor matters requiring completion. From then on, they lived in the house on weekends, and received a final occupancy permit on September 25, 2015. She did not claim the federal and Ontario new housing rebate until May 31, 2017.
Jorré DJ confirmed the denial of the rebate claims on two alternative grounds: first, the application was not submitted within two years of the day of substantial completion, as required by s. 256(3)(a)(iii); and, second, the new house was not constructed for use as the taxpayer’s primary place of residence, as required by s. 256(2)(a).
Respecting the first ground, he stated (at paras. 23, 29-30):
While the first occupancy certificate is not in itself determinative, the fact that it permits residential occupancy combined with the relatively minor list of items that are required to be done before issuance of a final certificate are significant factors to be considered.
Considering the situation overall, although there were still some things to be done, compared to what had been done, what had yet to be done was very modest in scope. I would also add that certain items are not necessary for there to be a completed house. Also, the Appellant and her husband were clearly able to live in their house by the end of March 2014.
I find that, prior to May 31, 2015, the new house was substantially complete.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 256 - Subsection 256(2) - Paragraph 256(2)(a) | larger weekend country home was not their primary place of residence | 301 |