Azhar v. R. - TCC: No HST new housing rebate for home sold shortly after purchase

Azhar v. R. - TCC:  No HST new housing rebate for home sold shortly after purchase

Azhar v. The Queen (November 9, 2016 – 2016 TCC 257, Boyle J.).

Précis:    Ms. Azhar listed a house for sale 11 days after she acquired it in 2013 and sold it shortly thereafter.  She maintained that the sale was motivated by changed circumstances and that her mother-in-law had in fact moved into the home prior to its sale.  She applied for a new housing rebate which CRA denied.  Ms. Azhar appealed to the Tax Court which dismissed her appeal, rejecting her evidence that her mother-in-law had resided at the house.  There was no order as to costs since this was an informal procedure appeal.

Decision:   The evidence of Ms. Azhar that her mother-in-law actually resided in the house in question (a pre-condition to the availability of the new housing rebate) was rejected by Justice Boyle:

[9]             The evidence in this case does not satisfy me on the balance of probabilities that the Appellant’s mother-in-law ever moved into or resided in the house.

[10]        My significant doubts about this arise from:

1.       The only reason given for the mother-in-law moving into and living in the house once they took possession and during the period it was listed for sale was due to construction issues. No detail was given. While it is possible things remained to be done after closing to a single family freehold house, one might expect that the work could more easily be accomplished without someone living there, and that the buyer would have to sign off on the remaining contracted work being done satisfactorily regardless of whether anyone was there to watch, supervise or get in the way.

2.       The listing and the advertising both refer in unqualified terms to the fact that the house was brand new and never lived in. It is hard to imagine how the presence of someone living in the house could not be apparent to prospective buyers looking at a brand new never lived in home. It is equally hard to imagine a realtor taking such a risk.

3.       I did not hear anything from the mother-in-law or the real estate agent to corroborate this, nor was I given any explanation for their absence. This causes me significant doubt that their testimony, if given, would support the Appellant.

4.       The Union Gas bill submitted shows an almost immaterial gas consumption. It was the Appellant’s final bill. It was only the first page and did not detail what the total charges were for — that is stated to be on page 2 which I was not given. This does not satisfy me that any gas was consumed in April through August.

5.       The hydroelectric and water bills submitted were the initial and final bills. The May bill was for $13 of electricity and recorded 0.00 cubic meters of daily water use. The final bill showed $25 of electricity and again 0.00 cubic meters of daily water consumption, which is about two gallons per day. That would only be sufficient for two flushes of a high efficiency toilet and leave nothing for bathing, showering, washing of dishes, etc.

6.       There were some inconsistencies in the testimony of the Appellant, in particular involving the timing of her husband learning that his job might end relative to their purchase and sale decisions.

[11]        In summary, it is entirely possible that the Appellant’s mother-in-law did in fact move in and live in the house. Unfortunately, the evidence before me simply does not allow me to conclude that this is more likely than not what happened. For that reason, I am dismissing the appeal.

There was no order as to costs since this was an informal procedure appeal.