NEW HOUSING REBATE FOR BUILDERS
TCC LOWERS THE BAR FOR "OCCUPATION AS A PLACE OF RESIDENCE"
As we have blogged here and here, homeowners who sell their newly built homes shortly after taking possession have long been a target of CRA audits. When these homeowners also claim the GST/HST New Housing Rebate, the CRA reviews their claims closely.
A key issue in these New Housing Rebate claims is whether the homebuyers occupied the property as a place of residence after completion of construction. In the past, courts have applied a stringent standard in interpreting what constitutes “occupation as a place of residence”.
In a recent decision, Sharma v. The King (2025 TCC 145), the Tax Court of Canada (“TCC”) lowered the bar for establishing “occupation as a place of residence”, signalling an attenuated interpretation that favours taxpayers.