[OFFICIAL ENGLISH TRANSLATION]
2001-1955(GST)I
BETWEEN:
GUY BOUCHER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Appeal heard on June 26, 2002, at Montréal, Quebec, by
the Honourable Judge Lucie Lamarre
Appearances
For the Appellant: The Appellant himself
Counsel for the Respondent: François Marcoux
JUDGMENT
The appeal from the assessment made under Part IX of the Excise Tax Act, notice of which is dated September 7, 2000, and bears number 001940677229G0001 is allowed for the period of June 2000, with costs if any, and the assessment is referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that the appellant is entitled to a goods and services tax new housing rebate of $2,099.62 under subsection 256(2) of the Act.
Signed at Ottawa, Canada, this 12th day of July 2002.
|
"Lucie Lamarre" |
J.T.C.C.
Translation certified true
on this 17th day of October 2003.
Sophie Debbané, Revisor
[OFFICIAL ENGLISH TRANSLATION]
Date: 20020712
Docket: 2001-1955(GST)I
BETWEEN:
GUY BOUCHER,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
REASONS FOR JUDGMENT
Lamarre, J.T.C.C.
[1] This is an appeal from an assessment made under the Excise Tax Act ("Act") by which the Minister of National Revenue ("Minister") denied the appellant a goods and services tax ("GST") new housing rebate of $2,099.62 on the ground that one of the conditions imposed by subsection 256(2) of the Act had not been met.
[2] The relevant parts of subsection 256(2) of the Act read as follows:
256(2) Rebate for owner-built homes - Where
(a) a particular individual constructs or substantially renovates, or engages another person to construct or substantially renovate for the particular individual, a residential complex that is a single unit residential complex or a residential condominium unit for use as the primary place of residence of the particular individual or a relation of the particular individual,
. . .
the Minister shall, subject to subsection (3), pay a rebate to the particular individual . . . .
[3] In making the assessment, the Minister relied on the facts found in subparagraphs 4(b) et seq. of the Reply to the Notice of Appeal, which read as follows:
[TRANSLATION]
(b) the Appellant was not a registrant during the period at issue;
(c) the Appellant is claiming a new housing tax (GST) rebate to which he is not entitled for the following reasons:
(i) all of the Appellant's official addresses are in the Montréal area, that is, 90 Rue Lacaille in St-Constant, Quebec J5A 1B2;
(ii) in 1998, the Appellant had a residence or house constructed at 1102 Chester in Val-Bélair, Quebec, on land he had purchased in 1996;
(iii) the Appellant worked as a police officer in the Montréal area before, during and after the period at issue;
(iv) the Appellant lived with his spouse and children at 90 Rue Lacaille in St-Constant before, during and after the period at issue;
(v) the house in respect of which the rebate was applied for is not the primary place of residence of the Appellant or his relations;
(vi) the Val-Bélair residence in respect of which the new housing tax (GST) rebate was applied for is not and has never been inhabited by the Appellant's relations, that is, his spouse and children, as their primary place of residence, and this was the case before, during and after the period at issue;
(vii) the Appellant sold the Val-Bélair house on or about October 16, 2000, without having used it as his primary place of residence;
(viii) the Appellant's children attended school in the Montréal area and not in Val-Bélair, which is in the Québec area;
(ix) the Appellant's wife attended the Université de Montréal and subsequently found a job in the Montréal area during the period at issue;
(x) for insurance policy purposes, the Val-Bélair property was considered a secondary residence;
(xi) the Appellant's situation is not one for which a new housing rebate can be accepted by the respondent since the condition in section 256(2) of the Excise Tax Act (R.S.C. 1985, c. E-15) providing that the newly constructed single unit residential complex be used as the primary place of residence of the particular individual or a relation of the particular individual was not met;
(xii) the Minister states that the Appellant cannot claim, and is unrightfully claiming, a new housing rebate of $2,099.62 for the period of June 2000;
[4] The appellant admitted that he lived in St-Constant in the Montréal area with his family until classes were over at the end of June 2000. At that time, they moved some of their furniture into the newly constructed residence in Val-Bélair in the Québec area, and the appellant's wife moved into that residence with the children. She had just completed a Bachelor of Education at the Université de Montréal and was looking for a job for the beginning of the new school year in the fall of 2000. She made job applications in Québec and Montréal. She did what was needed to enrol her children in schools in Québec. They could not be enrolled in June 2000 because of documents that were missing.
[5] The appellant's wife was not offered a job during the summer. It was not until September 2000 that she received a job offer from a school board in Montréal, which she finally accepted near the end of that month. She still works for that school board.
[6] It was in September 2000 that the appellant and his wife decided to put the Val-Bélair house up for sale. It was sold in October 2000.
[7] The appellant also said that he is a police officer in Montréal and that he had no intention of leaving that job. He and his wife, who are both Québec natives, had moved to Montréal because of his job. They have been living in St-Constant ever since. His wife took a four-year program at the Université de Montréal, and they enrolled their children in school in Montréal. However, they always intended to return to Québec. During the last year his wife was in university, that is, the 1999-2000 school year, they offered the St-Constant house for sale in the hope of going to live in Québec at the end of the school year. The appellant talked to his employer to obtain a compressed work schedule over three or four days so that he could spend more time with his family in Québec. However, since his wife did not get a job in Québec, they gave up the idea of going to live there in September 2000 and took their St-Constant house off the market.
[8] It is also worth mentioning that the appellant had already offered the Val-Bélair house in the Québec area (construction of which was not completed until early 2000) for sale in the fall of 1999, at the same time as the St-Constant house. By selling the two houses, they hoped to get the money they needed to build a larger house in Québec. However, neither of the two houses was sold at that time. They took the Val-Bélair house off the market so they could move into it when classes ended in June 2000. They left the St-Constant house on the market. As I mentioned earlier, since that house had not yet been sold in September 2000, and in view of the circumstances, they took it off the market and put the Val-Bélair house up for sale once again. It was sold in October 2000.
[9] It is also worth pointing out that the appellant added two rooms to the Val-Bélair house during the summer of 2000 to make it more suitable for their needs. The appellant also said that there was no telephone in the house because they used a cellular telephone.
[10] Moreover, the appellant explained that the insurance company had considered the St-Constant house their principal residence because it was not possible to have two principal residences on an insurance policy. However, he did not pay the high premium applicable to cottages on the Val-Bélair house in the Québec area; instead, he paid the premium applicable to a principal residence. It was because of his job that he used the St-Constant address in his correspondence. However, his wife used her address in Val-Bélair as her mailing address after she moved in June 2000.
[11] The only issue is whether the appellant constructed the Val-Bélair residence for use as his primary place of residence, as required by paragraph 256(2)(a) of the Act.
[12] In Burrows v. Canada, [1998] T.C.J. No. 606 (Q.L.), to which I was referred by counsel for the respondent, Judge Hamlyn reiterated the Minister's position on what constitutes a primary place of residence as follows in paragraphs 13-14:
¶ 13 The Minister's position on the meaning of "primary place of residence" is found in GST Memorandum 500-4-5, Housing and Other Property Rebates in which it states:
"primary place of residence" means a residential unit, owned jointly or otherwise, which is intended to be inhabited by an individual on a permanent basis. Only one residence may be a person's primary residence. For rebate purposes, if a person has more than one place of residence, the following factors are taken into consideration to determine if the residence qualifies as the primary residence: whether the individual intends to use the home as his or her primary residence, the length of time the premises are inhabited, and the designation of that address on personal records.
¶ 14 The Minister's Policy Paper P-130 entitled Place of residence, elaborates upon the Minister's position on the meaning of the term "primary place of residence". The Policy Paper points out that while a person may have more than one place of residence, he may only have one "primary place of residence". When determining the primary place of residence, the Paper indicates that consideration should be given to the purpose of the stay, the amount of time of the stay and the physical presence at the residence.
[13] The evidence shows that the appellant and his wife constructed the Val-Bélair residence with the intention of moving into it. The appellant certainly stated that he would not have built it otherwise. This is also shown by the fact that the St-Constant house was put up for sale for almost a year starting in the fall of 1999, that is, shortly before the construction work on the Val-Bélair residence ended in early 2000.
[14] In Bérubé v. The Queen, T.C.C., No. 1999-215 (GST)I, July 6, 2000 (2000 GTC 868), the criteria indicative of a primary place of residence found in Policy Statement P-228 issued on March 30, 1999, were reiterated. Those criteria are found, inter alia, in paragraph 5, which states:
Criteria Indicative of a Primary Place of Residence
. . .
5. Where the individual owned or leased another place of residence at the time the residential complex or co-op share in question was acquired, constructed or substantially renovated, the disposition of that place of residence or clear evidence that that place of residence is offered for sale or rental at or before the occupation of the complex or residential unit may indicate that the complex or unit is the individual's primary place of residence.
[15] I acknowledge that we have only the appellant's testimony to show that the St-Constant residence was offered for sale. However, this was not questioned by the respondent on cross-examination, and I have no reason to doubt the appellant's credibility.
[16] Moreover, it is true that the fact that the appellant offered the Val-Bélair residence for sale as early as the fall of 1999 may cast doubt on the intention of the appellant and his family to move into that particular residence, which the appellant said was a little small for his needs. However, the evidence shows that they moved into the house in June 2000 with the intention of remaining there since they added two bedrooms to the house and since it already had three bathrooms.
[17] As for the length of time the appellant and his family inhabited the Val-Bélair house, it is clear that the reason they moved at the end of the 2000 school year was that the appellant's wife was finishing her studies at the Université de Montréal and her own children were also in school in Montréal. It is understandable that the family was unable to move earlier. Moreover, it is clear that the family inhabited the Val-Bélair residence on a permanent basis as its primary place of residence during the period from June to September 2000. It was only the circumstances surrounding the new job obtained by the appellant's wife, which were not known until September 2000, that forced them to move back to Montréal.
[18] I do not think it can be said that the Val-Bélair residence was a secondary residence. Moreover, it was offered for sale in September 2000, as soon as the appellant found out that his wife would not have a job in Québec. In my opinion, if his wife had found a job in Québec in September 2000, the respondent would not have contested the new housing tax (GST) rebate. The fact that his wife's efforts were unsuccessful in the Québec area does not change the purpose for which the Val-Bélair residence was constructed.
[19] For these reasons, it is my opinion that the appellant meets the conditions provided for in subsection 256(2) of the Act, specifically the condition requiring him to have constructed the Val-Bélair residence for use as the primary place of residence of him and his family. Since this was the only issue, I am of the opinion that the appeal should be allowed.
Signed at Ottawa, Canada, this 12th day of July 2002.
|
"Lucie Lamarre" |
J.T.C.C.
Translation certified true
on this 17th day of October 2003.
Sophie Debbané, Revisor