http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/143078/index.do
Iqbal v. The Queen (March 17, 2016 – 2016 TCC 68, V. Miller J.).
Précis: Mr. Iqbal was assessed deying him a GST/HST New Housing Rebate for a property the “Elbern Property”) that he held for 3 months in 2011 before selling it. At the date he purchased, and later sold, the Elbern Property he owned a home (the “Blackmere Property) which he had purchased in 2005 and in which he continued to reside in at the date of the Tax Court trial.
The Tax Court dismissed the appeal on the basis that the Elbern Property was not acquired for the purpose of occupying it as a primary residence (or the primary residence of a qualified relation). As this was an informal procedure appeal there was not order as to costs.
Decision: The facts of this case were on the blatant side:
[7] The Appellant has lived at 21 Blackmere Circle in Brampton (the “Blackmere Property” or “Blackmere”) since November 2005. He continues to live in the Blackmere Property. It was his evidence that this home is 28 years old and in need of upgrades and repairs. He stated that he sought out a new “dream” home that he and his wife could live in.
[8] On March 30, 2011, the Appellant entered into an assignment agreement for the purchase of the Elbern Property. This property was in the process of being constructed and initially had an anticipated move-in date of July 30, 2011.
[9] The Appellant stated that he then advertised the Blackmere Property for sale on Kijiji, in newspapers and in postings around his community. On May 10, 2011, he sold Blackmere to Muhammad Afroz who was a friend of one of his friends. The sale price was $450,000 and Mr. Afroz gave him a deposit of $1,000 cash and the closing was set for July 27, 2011 which coincided with the closing date for the Elbern Property. It was the Appellant’s evidence that the agreement with Mr. Afroz was a “gentlemen’s agreement”.
[10] The Appellant stated that he received a notice that the builder of the Elbern Property had postponed the closing date for that property to September 29, 2011. He tried to negotiate a new closing date for Blackmere with Mr. Afroz but was unsuccessful. He was required to pay Mr. Afroz $2,000 to be released from their agreement.
[11] The Appellant said that he offered the Blackmere Property for sale for a second time in 2011 through an exclusive listing with Mr. Khan.
[12] On September 27 or 28, 2011, the Appellant and his real estate agent, Masood Khan, conducted a Pre-Delivery Inspection of Elbern and discovered numerous problems including a stove exhaust pipe that did not conform to regulations, standing water in the basement, no mirrors, no shower door, and problems with the stairs.
[13] Upon taking possession of the home on September 29, 2011, the problems persisted and additional problems were noticed which included a malfunctioning heating unit, standing water on the main floor and water leaking near an electrical panel.
[14] Masood Khan conducted a TARION inspection on October 28, 2011. I note that this report did not indicate any problems concerning standing water or heat.
[15] The Appellant testified that he moved into the Elbern Property. However, he brought only one full bedroom set, a dressing table, a wardrobe, a dining room table and chairs, a side table, a microwave, a small two burner stove and a small oven. He left the remainder of his belongings at the Blackmere Property so that it would show well to prospective purchasers.
[16] It was the Appellant’s evidence that, for the next 4 months, he lived at Elbern 60-70% of the time with the remaining time at Blackmere. This was mainly due to the fact that the Elbern Property continued to have issues with the heating system and the Appellant has sensitivties in his extremities to cold weather. He stated that he slept and did his laundry at Blackmere. He would often shower at Blackmere as that property had a more accessible bath as opposed to the standing shower at Elbern. During one of these four months, the Appellant was in Australia; however, he testified that his wife remained at Elbern during this time.
[17] The Appellant listed the Elbern Property for sale on December 2, 2011 with Masood Khan acting as his real estate agent. The Appellant alleged that he was frustrated with the repairs needed in the Elbern Property.
[18] The Elbern Property sold on December 30, 2011 and closed on January 20, 2012 for a sale price of $780,000. The Appellant had purchased this property from the builder for $603,530.97.
The Tax Court was not persuaded by Mr. Iqbal’s claim:
[36] The Appellant has resided in the Blackmere Property since 2005 and at the time of the hearing of this appeal he continued to reside in the Blackmere Property. In the meantime, he has purchased and sold the Cabano Property, the Bear Run Property and the Elbern Property and he claimed the Rebate for each of these properties. It appears to me that the Appellant is in the business of buying and selling homes and while this practice is not prohibited, it definitely disentitles him from claiming a GST/HST New Housing Rebate.
[37] The appeal is dismissed.
There was no order as to costs as this was an informal procedure appeal.