Margolin v. R. – TCC: New Housing Rebate denied – not primary place of residence

Margolin v. R. – TCC:  New Housing Rebate denied – not primary place of residence

Margolin v. The Queen (February 21, 2018 – 2018 TCC 36, Bocock J.).

Précis:   In March of 2014 the taxpayer took occupancy of a property known as 116 Riding Mountain Drive, Richmond Hill, Ontario.  He sold the property in August of 2014.  The sole issue before the Tax Court was whether he acquired the property for use as his primary place of residence for the purposes of obtaining a HST New Housing Rebate.  During the period he owned the Riding Mountain Drive he also owned a large home situate on 11 acres of property in King City, Ontario which he still owned at the date of the trial of this appeal.  The Tax Court rejected his evidence that he had occupied the Riding Mountain Drive property as his primary place of residence in 2014 and dismissed the appeal.  These was no order as to costs since this was an informal procedure appeal.

Decision:   The Court simply did not accept the taxpayer’s evidence:

[31]         Ultimately, Mr. Margolin must satisfy both the intention to occupy as a primary place of residence and consistent actual occupancy to receive the rebate. Should on balance he fail in either case, the appeal will be dismissed.

[32]         Therefore, the Court focuses on the second prong: the requirement by Mr. Margolin to first occupy the Rebate [Riding Mountain Drive] property as a primary place of residence. For the following listed examples described and revealed through these reasons, the Court finds that, on balance, he has failed to do so:

(i) the speed of listing and sale of the Rebate property after its release for occupancy;

(ii) the lack of substantial relocation and consistent habitation at the Rebate property;

(iii) the short term and peculiar financing arrangements;

(iv) the continued occupancy and habitation by both Mr. Margolin and Natalia [the taxpayer’s wife] at Jane Street throughout the ownership and purported occupancy of the Rebate property;

(v) the measurable drop in consumption levels of utilities after the completion of construction and occupancy including the consumption of electricity during the hottest months of the year, a period when electrically powered air-conditioning rather than gas powered forced air heat would be used;

(vi) Natalia did not ever occupy the Rebate property and, at best, Mr. Margolin by his own testimony did so on a sporadic, transient and ad hoc basis; and

(vii) although listing agreements were produced for Lynvest and Jane Street, no such agreements (obviously readily available and procurable by Mr. Margolin) were produced for the Rebate property leaving the Court to speculate when it was actually listed for sale. At the latest, the Rebate property had to have been listed in May, 2014, less than one month after purported occupancy.

[33]         In conclusion, all of the foregoing leads the Court to conclude that at and after the date which Mr. Margolin became the registered owner of the Rebate property, he did not become the first to use it as a primary place of residence. Mr. Margolin moved into Jane Street in June or July of 2012: his testimony on the Jane Street occupancy date was not entirely clear. However, it is more likely than not, given all the evidence, that after the summer of 2012 Jane Street remained and remains today his primary place of residence. In respect of this appeal, the only critical period for the determination of use as a primary place of residence is April to August of 2014. During that period, it is more likely than not that Mr. Margolin lived at Jane Street with his wife where they both primarily resided.

As a result the appeal was dismissed.  These was no order as to costs since this was an informal procedure appeal.