HST New Housing Rebate Allowed by Federal Court of Appeal

Posted By: Marina Skachkova on April 27, 2016 at 3:19:46 in All

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HST New Housing Rebate Allowed by Federal Court of Appeal:  Property is not Required to be Occupied

TaxChambers LLP partner, Bobby Solhi*, represented the Appellant before a three-judge panel at the Federal Court of Appeal where he successfully argued that the lower court judge at the Tax Court of Canada had made an error by disallowing the taxpayer’s claim to the HST New Housing Rebate on the purchase of a new home in Richmond Hill, Ontario (Ranjbar v. Canada).

FCA framed the tax appeal as follows:

“On this appeal the appellant argues that the Judge erred in law by failing to consider that the appellant satisfied subparagraph 254(2)(g)(ii) of the Act, and so would qualify for the new housing rebate.”

The FCA decision was, importantly,  the first time it has examined clause (g) of subsection 254(2) of the Excise Tax Act (ETA) where it held that a purchaser of a new home may still qualify for the HST/GST New Housing rebate even if they do not occupy the home, so long as they meet all the other requirements.

The HST New Housing Rebate allowed by Federal Court of Appeal in full and the taxpayer was entitled to the full GST/HST New Housing Rebate.

The FCA concluded:

“I would allow the appeal and set aside the judgment of the Tax Court in part as it relates to the Richmond Hill property, and, pronouncing the judgment that should have been made, I would return the assessment to the Minister for re-assessment on the basis that the appellant is entitled to the GST/HST new housing rebate in respect of the Richmond Hill property.”

*Bobby B. Solhi is a tax lawyer and partner at TaxChambers LLP, a boutique tax law firm in Toronto, Canada. 

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