- Taxpayers in Ontario often bought and renovated homes during a housing boom, leading to scrutiny by the Canada Revenue Agency (CRA).
- CRA targets consecutive home sales, aiming to reclassify capital gains as business income, which is fully taxable, and apply GST/HST.
- Multiple property transactions may not always be for profit; life events can also prompt sales.
- CRA assumes some taxpayers are builders under the Excise Tax Act, requiring them to report business income and collect GST/HST.
- The self-supply or personal-use exception under subsection 191(5) of the ETA can exempt taxpayers from GST/HST if they resided in the property.
- In Swift v. The Queen, 2020 TCC 115, the Tax Court ruled the appellant was not a builder and could claim the personal-use exemption.
- The court referenced factors from Happy Valley Farms Ltd. v. The Queen to determine the appellant’s status.
- The self-supply or personal-use exception test was also discussed in Coates v. The Queen, 2011 TCC 74.
Source: sdtaxlaw.ca
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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