Précis: This was an application under section 58 of the Tax Court of Canada Rules, General Procedure. The Ontario transitional new housing rebate is based on a percentage of completion calculation. The taxpayer was constructing a condominium complex. In its calculation it added the cost of the underlying land to both the numerator and denominator and arrive at 25.64% percentage of completion. CRA excluded the cost of the land from the calculation and arrived at 17.56% percentage of completion which meant that the taxpayer was entitled to a smaller rebate. CRA’s argument, in a nutshell, was that there was no retail sales tax (“RST”) payable on land and since the rebate was designed to compensate for the underlying RST it was illogical to include the cost of the land in the calculation. The Tax Court rejected CRA’s argument holding that on a proper construction of the Excise Tax Act and the Regulations the cost of land should be included in the rebate calculation. Thus the application of the taxpayer under section 58 was allowed with costs in any event of the cause.
Metrogate v. R. – TCC: Cost of land included in calculation of Ontario transitional new housing rebateREAD MORE »