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.
