Executive Summary: Key Legal and Evidentiary Issues

• Anwar Talukdar appealed the Minister's denial of a GST/HST New Housing Rebate of $22,593.31 for a condominium purchased in Scarborough, Ontario

• The Minister contended that Talukdar lacked the requisite intention to use the property as a primary residence under paragraph 254(2)(b) of the Excise Tax Act

• Occupancy requirements under paragraph 254(2)(g) were also disputed, questioning whether Talukdar was the first to occupy the unit as a place of residence

• Documentary evidence was notably sparse, with the appellant unable to produce utility bills, moving invoices, or proof of address changes to government agencies

• Credibility of the appellant's oral testimony became the central determinative factor, as no corroborating witnesses were called by either party

• The Court found Talukdar's testimony credible and allowed the appeal, referring the matter back to the Minister for reassessment

Background and the purchase of the Rebate Property

Anwar Talukdar, an immigrant to Canada employed as a restaurant server at a local hotel, and his wife Salma Talukdar purchased a new residential condominium unit at 401-1346 Danforth Road, Scarborough, Ontario, from Heintzman Co-operative Development Corporation on July 17, 2018, for a purchase price of $298,812. At the time, the Talukdar family, including their three children all under the age of 10, was living with Mr. Talukdar's mother-in-law at her residence on Regent Street in the City of Toronto. In 2017, Mr. Talukdar had suffered a serious heart attack that caused him to rethink his priorities, and he became determined to secure a home of his own for his family. A friend at work introduced him to Options for Homes, a non-profit organization that provided assistance to first-time home buyers by loaning to them most of the funds necessary to make an initial down payment towards the purchase of a home, provided the buyer agrees not to rent out the home and can qualify for a mortgage on his or her own. Ownership of the property was transferred to Mr. and Mrs. Talukdar on January 10, 2019, and on May 10, 2019, Mr. Talukdar filed an application for the Rebate and was credited with the Rebate by the builder of the Rebate Property.

The Minister's denial and the statutory framework

The Minister of National Revenue issued a Notice of Assessment on April 26, 2021, denying the Rebate, which was confirmed by Notice dated November 4, 2022. The denial rested on two provisions of subsection 254(2) of the Excise Tax Act. First, paragraph 254(2)(b) requires that at the time the purchaser becomes liable under the agreement of purchase and sale, the individual must be acquiring the unit for use as a primary place of residence. Second, paragraph 254(2)(g) requires that the purchaser or a relation be the first individual to occupy the unit as a place of residence after substantial completion of its construction. The Minister's position was that Mr. Talukdar satisfied neither condition.

The Respondent's arguments and evidentiary concerns

The Crown, represented by counsel David Heppenstall, argued that Mr. Talukdar failed to discharge his burden of proving on a balance of probabilities that he purchased the Rebate Property for use as his primary place of residence. The Respondent pointed to several evidentiary gaps: Mr. Talukdar never changed his address with the Canada Revenue Agency, the school of his children, or the Province of Ontario for purposes of his driver's license, all of which remained at the Regent Street address. His personal bank statements for the period of January 1, 2019, to June 30, 2020, did not set out a physical address, and he was unable on cross-examination to point to any expenses in those statements related to the maintenance of the Rebate Property, such as the payment of a utility bill. He could not produce landline telephone bills, internet bills, or television bills for the Rebate Property, nor an invoice from a moving company or any credit card or bank statements showing payment for such a move. Only a single utility bill from the month of November 2019 was produced, which was, in the Respondent's view, unusually low at $32.91 for electricity and thermal heat. Mr. Talukdar also testified that the main reason he ultimately sold the Rebate Property was that he could not get parking in the building and there was no municipal parking within one-half a kilometer, leading to numerous parking tickets, but he was unable to produce any copies of those tickets or correspondence demonstrating efforts to find suitable parking. Additionally, his two older children continued attending school near the Regent Street property rather than near the Rebate Property, which Mr. Talukdar testified were approximately a 30 to 40-minute drive apart depending on traffic, and his mother-in-law continued to look after his children, including his youngest child who was not yet of school age, at the Regent Street property rather than at the Rebate Property.

Mr. Talukdar's testimony and personal circumstances

Mr. Talukdar, who represented himself at the hearing, was the sole witness; the Respondent did not call any witnesses. He testified that following his 2017 heart attack, securing a home for his family became a priority, as he had never owned his own residence or in fact any real property before suffering the heart attack. He explained that after being approved by Options for Homes, he entered into the Agreement of Purchase and Sale with the intention of moving his family into the Rebate Property. He knew the Rebate Property did not come with parking but believed, or at least hoped, that once he moved in he would be able to find suitable parking for rent in or within a close distance of the property. He did not retain the services of a moving company, as he and a friend moved all the furniture the family needed from the Regent Street property to the Rebate Property themselves. Shortly before the family moved, his wife got a job at a school that was nearer to the Rebate Property than to the Regent Street property, making the new home more convenient for her. He acknowledged that his two school-aged children continued to attend the school near the Regent Street property, explaining that as a father he believed this was in the best interests of his young children. On cross-examination, Mr. Talukdar testified that he and his family slept at the Rebate Property most, if not all, nights after moving in during January 2019 until the time they sold the property in May 2020, with some nights where his children may have slept at their grandmother's place during visits. On weekday mornings, he would drive his wife to her job at the school near the Rebate Property, then drop off the youngest child at daycare and the older children at their school near the Regent Street property, before going to work himself, and later pick everyone up before returning to the Rebate Property. The persistent lack of parking became an acute problem, and after approximately 13 months of living in the property, he and his wife listed it for sale in February 2020 and sold it to a third party on May 22, 2020, for a purchase price of $440,000. After selling, the family did not return to the Regent Street property but moved in with Mr. Talukdar's brother-in-law's family in Brampton, Ontario, where they remained until they bought a new residence once pandemic-related restrictions began to ease some months later.

The Court's assessment of credibility and ruling

Justice J. Scott Bodie of the Tax Court of Canada found Mr. Talukdar's testimony to be credible and reliable. The Court declined to draw a negative inference from the lack of documentary evidence, noting that the utility bills requested by the Respondent were from a period that was over five years before the date of the hearing and, for Mr. Talukdar, at least two moves ago. The Court also observed that a series of utility bills or parking tickets addressed to Mr. Talukdar at the Rebate Property, while they may have served as an indicator of residence, would not have been dispositive of the key issues of his intention at the time the Agreement of Purchase and Sale was entered into, nor of the question of whether he occupied the Rebate Property as his primary place of residence. Justice Bodie found Mr. Talukdar's description of his change of perspective following his 2017 heart attack compelling. There was nothing in the evidence to indicate that he had the means or the inclination to engage in real estate speculation. The Respondent conceded that there was no indication that he leased the Rebate Property or that anybody else occupied it after substantial completion, as lessee or in any other capacity. The Court reasoned that 13 months seemed a long time for someone in Mr. Talukdar's situation to leave the only property he has ever owned vacant while continuing to carry a mortgage which he qualified for only with the help of a non-profit organization. On the issue of address changes, the Court agreed with Justice Angers' statement in Yang v. The Queen, 2009 TCC 636, that the change of address factor may be of less importance in determining use as a primary residence where owners of a new property still have relatives at a former place of residence, noting that Mr. Talukdar's mother-in-law continued to live at the Regent Street property. The appeal was allowed, without costs, and the Assessment was referred back to the Minister of National Revenue for reconsideration and reassessment on the basis that Mr. Talukdar is entitled to the GST/HST Rebate in respect of the Rebate Property in the amount of $22,593.31.