http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/110263/index.do 
Montemarano v. The Queen (June 18, 2015 – 2015 TCC 151, V. Miller, J.).
Précis: The point at issue in this decision was whether the taxpayer had purchased a home for use as his primary residence and was therefore entitled to the federal and Ontario New Housing Rebates he claimed. His evidence was that he was in a long term relationship with his girlfriend when he signed the agreement to purchase the home on June 22, 2009 and wanted the home to be their primary residence. He and his girlfriend moved into the property in January of 2011 but the relationship ended in March of that year. In July he put the home up for sale and it sold in September for a profit of approximately $130,000.
The Court accepted the taxpayer’s evidence of his intention to purchase the home as a primary residence for himself and his former girlfriend and allowed the appeal. As it was an Informal Procedure appeal there was no order as to costs.
Decision: The simple question before the Court on this appeal was whether the appellant’s evidence that he purchased the home to use as a primary residence for himself and his former girlfriend was credible. The Court found that it was:
[16] It is my view that the Appellant purchased the Property with the intention of making it his primary residence and he has provided sufficient evidence of this intention. The Appellant has established to my satisfaction that he lived in the Property from January to July 2011. He stated that he decided to sell the Property after his relationship with his girlfriend ended. The Appellant gave his evidence in a straightforward manner and I found him to be credible.
[17] Aside from the evidence of his two friends, the Appellant’s testimony about moving into the Property was supported by his hydro bills and a letter from his real estate agent. The letter from his real estate agent was dated July 2011 and in it the agent made several suggestions about how the Appellant could make his home ready for a quick sale. The agent recommended that the Appellant should remove all the furniture from his home and either have it staged or leave it vacant. It was the agent’s opinion that the Appellant’s style of furniture did not show his home well. The agent also recommended, among other things, that the Appellant should have all the carpets professionally cleaned; the paint touched- up in the bedrooms and all garbage cleaned out of the garage.
[18] In assuming that the Appellant did not move into the Property, the Minister of National Revenue (the “Minister”) relied on the fact that the Appellant did not change his address on record with the Canada Revenue Agency (“CRA”), the Ministry of Transportation for his driver’s licence and the Ministry of Health for his health card. However, in the circumstances of this case, this factor is not very important because the Appellant’s former residence is his parent’s home and he could obtain his mail from them.
[19] At the objection stage of this appeal, the Appellant sent various documents to the CRA. One such document was his water bill from the Region of Peel. Relying on this bill, the Minister assumed that “no water had been used at the Property as of February 28, 2011”. The Appellant explained that the bills were not obvious to read and that there was no charge for water when the usage was less than 10,000 litres. I have accepted the Appellant’s evidence.
[20] Although it was not explicitly stated in the Reply, I have inferred from the Reply and from the questions asked by counsel for the Respondent that the Minister believed that the Appellant was aware of the real estate market and that he purchased the Property to “flip” it.
[21] The Appellant worked for Madison Homes Holdings Ltd. (“Madison”) in 2009 as a construction supervisor. He stated that he had no interactions with the purchasers of the properties. His work with Madison was the same as that with his present employer. It was his evidence that he knew little about the real estate market.
[22] Counsel for the Respondent argued that, at the hearing, the Appellant gave a different reason for selling the Property than he gave to the auditor when he was contacted by the CRA. Initially, the Appellant told the CRA that he sold the Property because he could not afford it. The Appellant explained that when he received the telephone call from the CRA, he was at work and he thought that the call was a joke. I find that the Appellant’s explanation is acceptable. As I stated earlier, I found that the Appellant was credible and his explanation for selling the Property was plausible.
As a consequence the appeal was allowed. As it was an Informal Procedure appeal there was no order as to costs.