https://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/405690/index.do
Ghosi v. The Queen (May 6, 2019 – 2019 TCC 104, Campbell J.).
Précis: The taxpayer claimed a New Housing Rebate of $24,000 in connection with the purchase of a property located at 128 Novan Crescent in Aurora, Ontario. The taxpayer was a teacher and he and his wife had lived in the same home in Markham since 2005. The agreement of purchase and sale was signed in 2015 by the taxpayer, his wife and a family friend. The evidence was that the family friend wanted a place where her son could move because of ongoing disputes with his father. Title to the property was transferred in January of 2016 and in March the taxpayer moved some basic necessities to the house, retaining ownership of his home in Markham where most of his personal belongings remained. Although the taxpayer testified that he planned to rent and renovate the Markham property that never happened and he and his wife moved back there in June of 2016.
The Tax Court Judge concluded that the taxpayer never formed a settled intention to treat the Aurora property as his primary and permanent place of residence. As a result the appeal was dismissed but without costs since this was an informal procedure appeal.
Decision: Basically the Tax Court did not accept the taxpayer’s evidence of his intention to occupy the property in Aurora as his primary place of residence:
[25] The evidence supports my conclusion that, at the time he and his wife signed the Agreement of Purchase and Sale, he did not have the requisite intent that the property being acquired was for use as his primary place of residence. Rather, the evidence suggests he signed the Agreement of Purchase and Sale simply to assist a family friend in resolving family issues involving her son by assisting her in obtaining bank financing to purchase the Aurora property. The Appellant is asking me to accept his stated subjective intention, which is not supported by the objective evidence.
[26] As Chief Justice Bowman pointed out in his reasons in Coburn Realty Ltd. v Her Majesty the Queen, 2006 TCC 245, at paragraph 10:
Statements by a taxpayer of his or her subjective purpose and intent are not necessarily and in every case the most reliable basis upon which such a question can be determined. The actual use is frequently the best evidence of the purpose of the acquisition. …
[27] He went on to state at paragraph 11:
It should be noted that the expression “for use primarily …” requires the determination of the purpose of the acquisition, not the actual use. Nonetheless, I should think that as a practical matter if property is in fact used primarily for commercial purposes, it is a reasonable inference that it was acquired for that purpose.
[28] In this case, the actual use of the residence in Aurora was clearly for the son's residence.
[29] The Appellant did not have the requisite intent of occupying the Aurora property as the primary place of residence at the time of executing the Agreement of Purchase and Sale. This factor alone disqualifies him from meeting one of the requirements set out in subsection 254(2) of the Act, and more specifically, the wording contained in paragraph 254(2)(b).
[30] If there was intent by the Appellant to utilize the Aurora residence as his primary place of residence – which, however, I do not believe even occurred at a later date - it did not exist at the time of executing the Agreement of Purchase and Sale as required under that provision when he assumed liability under the agreement.
[31] Although he moved into the property for several months after the purchase, the objective independent facts surrounding this move do not support the Appellant's stated subjective intent. He moved very little personal belongings into the new residence - just a few necessities and certainly none of the amenities that support long-term living arrangements.
[32] He testified that he wanted to renovate the Markham residence and sell it or lease it as a furnished premise. However, that never occurred, and I had no evidence before me respecting where such day-to-day essentials, such as larger appliances, beds, tables, and chairs came from, or whether they even moved these items into the property at any point in time. The friend that moved the Appellant was not present in Court, and so I did not hear evidence in this regard. In addition, there was no attempt to change the mailing address he had since 2005 for any purpose.
[33] I believe the Appellant's testimony and his cross-examination support my conclusion when he agreed that he partially moved into the Aurora residence as he wanted to test out those living arrangements and if it worked for him and his wife, they would stay on at this property, but if it did not, then they would move back into the property in Markham. This, again, supports the conclusion that the Appellant never had a settled intention at any point in time to treat the Aurora property as his primary and permanent place of residence.
As a result the appeal was dismissed but without costs since this was an informal procedure appeal.