Sivakumar v. R. – TCC: Taxpayer’s “Partial Move” Into New House Did Not Entitle Her to New Housing GST Rebate

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Sivakumar v. The Queen[1] (October 11, 2013) is a GST case dealing with the taxpayer’s claim to a new housing rebate:

[2]             The issue in this appeal is whether the Appellant is entitled to a new housing rebate under the Excise Tax Act.  The issue is dependent on whether the Appellant acquired the subject property for use as her and her family’s primary place of residence.  The property at issue is located at 6 Blairmore Terrace in Brampton.

The purchase closed on October 22, 2010.  The house was listed for resale on December 8, 2010 and sold on March 17, 2011 at a profit of approximately $85,000.  The taxpayer testified that she and her husband “partially moved” into the house but her children continued to reside with her parents at her first home (the “Eastway home”) out of safety concerns about the over attic hatches in the loft and the low location of a window.  The partial move seems to have involved putting up curtains and moving in a bed (or beds).  The court was not impressed by this evidence:

[24]        I am still not sure what the Appellant meant by her explanations of “partially” moving in.  I have no evidence, in fact, that she and her husband actually resided in this property for any nights, and she referred to only moving a bed or beds in, and putting up drapes.  These are not actions that make a property a primary residence.

Moreover the taxpayer’s course of conduct with three other houses during the same period made her “primary place of residence” claim suspect:

[10]        During the period in late 2010, and subsequently in 2011 and 2012, there were three other properties that the Appellant acquired in addition to the Eastway and Blairmore properties.

[11]        On October 4, 2010, the Appellant signed an agreement of purchase and sale for 4 Apple Valley Way.  This was just prior to her purchase of the Blairmore property on October 22, 2010. The Apple Valley property was transferred on November 8, 2011.

[12]        On February 6, 2011, the Appellant signed an agreement of purchase and sale in respect of 6 Gentry Way, which was transferred on October 18, 2011.

[13]        Finally, the Appellant signed an offer of purchase and sale on January 24, 2011, for 45 Education Road, which was transferred on May 3, 2012.

[14]        Rebates were applied for and paid in respect to all of these properties, including the initial Eastway property.

[19]        When I see the timelines and dealings with these five different properties over a very short period of time, it leads to a conclusion that the Appellant is involved in investing in properties, at the very least, and at the most, in a so-called “flipping” of properties.

[20]        Her actions support an investment history and an investment strategy.

It was not surprising that the appeal was dismissed from the bench.

[1] 2013 TCC 325.