- In Fadali v. The King, the Tax Court held that a taxpayer who built and sold a newly constructed home was a GST/HST “builder,” so the sale was taxable and GST/HST had to be collected and remitted.
- The taxpayer could not claim input tax credits because he was not registered when the construction-related tax became payable; only a section 257 rebate may have been available.
- The Court said the taxpayer’s claimed personal/family intent was not enough; it looked at objective facts like financing, timing, occupancy, sale history, and other real estate activity.
- This GST/HST builder analysis is separate from the federal residential property flipping rule, though both can treat short-term housing transactions as profit-oriented.
- Main takeaway: selling a newly built home is not automatically GST/HST-free, and professional tax advice is important before selling.
Source: goodservicetax.com
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.
Latest Posts in "Canada"
- Salac v. The King: GST/HST Input Tax Credit and Penalty Decision
- B.C. Expands PST to Accounting Services Effective October 1, 2026
- Canada to Impose Counter-Tariffs on CAD 27.6 Billion of US Goods from 8 September 2026
- GST/HST Ruling on Cottage Rental Agency Short-Term Accommodation Supplies
- Canada–US Trade Talks Collapse as 50% US Tariffs Trigger Matching Canadian Response
