Parthiban v. R. - TCC: Home occupied by a non-resident and his family was primary residence for GST rebate

Parthiban v. R. - TCC:  Home occupied by a non-resident and his family was primary residence for GST rebate

Parthiban v. The Queen (March 2, 2017 – 2017 TCC 30, Boyle J.).

Précis:   This was one of those “scratch your head” cases where CRA stuck to an indefensible position throughout while being polite and cooperative with the Court.  Mr. Parthiban was a resident of the United Kingdom.  In 2012 he bought a residence in Canada where he and his family resided.  He claimed a GST new housing rebate which CRA denied on the basis that he was a visitor to Canada and not a resident of Canada.  Justice Boyle held that CRA’s position was simply wrong:

[9]             The Respondent’s position is wrong. The legislation is clear that the Appellant’s right to the rebate turns on the characterization of the house as a place of residence, not his status as a resident or non‑resident. This is also clear from the CRA’s own publications on the new housing rebate, including the Technical Interpretation issued to the Appellant at the time he was buying the house. It appears that CRA employees at the review and objection stages sought to read the words to deny the Appellant’s rebate because they believed he and his wife were not lawful immigrants or residents. This case was not helped by the fact that the Department of Justice assigned the Tax Court hearing to an immigration lawyer.

As a result the appeal was allowed and Justice Boyle, as a display of his disapproval, awarded costs of $250 to Mr. Parthiban (who was self-represented in an informal procedure appeal).

Decision:   The facts of this case almost make one feel sorry for the counsel constrained to argue it on behalf of CRA.  Clearly her client was asleep at the switch:

[3]             The Respondent was satisfied at the hearing that all of the evidence was that the Appellant, his wife and their young children have occupied the home throughout, and that the only other person to occupy the home is the Appellant’s wife’s brother who has lived with, and as part of, the family throughout the relevant time.

[4]             The Court was therefore left to resolve only the first issue, whether in December 2011 when he entered into the agreement of purchase and sale for the home, Mr. Parthiban intended to use it as his family’s primary place of residence.

[5]             Following the conclusion of the evidence, the Respondent rightly also agreed that all of the evidence indicated that he bought the home intending to use it as his family’s only place of residence, and that it has been used as such ever since they bought it through to today. The home has never been offered for sale nor for rent, and has never been left vacant.

[6]             The Appellant’s new housing rebate application was turned down because, per the Canada Revenue Agency (the “CRA”) letter turning down the rebate request, “for rebate purposes, your house in Canada can only be considered a secondary place of residence since your status while in Canada is a visitor”.

[22]        In the December 2012 closing, the Appellant requested a ruling on this issue from CRA’s GST/HST Rulings Group in Ottawa. In January 2013, he received a Technical Interpretation in response. It reads:

The “primary place of residence” of an individual is generally the residence that the individual inhabits on a permanent basis. Only one residence may be a person’s primary place of residence at any one time. If a person has more than one place of residence, the following are some of the factors that are taken into consideration when determining if the residence qualifies as the primary one . . . .

This is entirely consistent with the legislation and does not confuse a building as a place of residence with the owner’s country of residence.  The Technical Interpretation also correctly informs the Appellant that “[w]hether or not the purchaser is a non‑resident has no bearing on the eligibility of the new housing rebate or its assignment to the builder”.

[32]        My ability to characterize the house as having been intended to be used as their primary place of residence at the time they first agreed to buy it turns on whether the Appellant and his family intended to use that house as a place of residence. It does not turn on whether the Appellant or his family could have been the subject of a removal order, arrest, deportation, or even a rendering to a foreign facility. It turns on whether the family in fact intended to and did occupy the house as the family’s place of residence. It is also not a requirement that the family’s intention to use the house as their primary place of residence in December 2011 have been a smart, risk‑free, sensible, plan for their family; it merely has to have been their intended use. It is not relevant to their new housing rebate entitlement that their plan to reside effectively year‑round in Canada as visitors for a period of time which included the closing date on the house may have been risky given that they may not have been as successful as they might have expected in regularizing their personal immigration status if questioned or challenged. It does not matter that the risks associated with their understanding and plan were so great that the Respondent or individuals working for the Respondent might not be comfortable if it were them; it is not about them. It is this particular Appellant and his family whose intended use I am to assess and there is zero doubt that they intended to acquire their Markham home as their sole place of residence and that they have used it as that ever since they closed on it, notwithstanding that their immigration compliance may have been sketchy or that their immigration status may have made their intended use of the home a risky plan to be able to conclude smoothly. In fact, on the evidence they were able to conclude it. They closed on the house when it was built and moved in immediately.


 [33]        The Appellant’s appeal is allowed as his purchase of the Markham home satisfies the requirements of the new housing rebate. The CRA will be ordered to reassess accordingly. I am awarding fixed total costs of $250 in favour of the successful Appellant in this informal appeal.

[Footnotes omitted]

As a result the appeal was allowed and Justice Boyle, as a display of his disapproval, awarded costs of $250 to Mr. Parthiban (who was self-represented in an informal procedure appeal).