Housing

CRA GST/HST Audits: Why the "Builder" Characterization Matters in Tax Litigation For Canadian real estate investors, developers and property owners, few GST/HST issues can have consequences as significant as whether a taxpayer is a “builder” for purposes of the Excise Tax Act, R.S.C. 1985, c. E-15 (the “ETA”).Builder...

Fadali v. His Majesty the King, 2026 TCC 86 & Paragraph 123(1)(f) of the Excise Tax Act The Tax Court of Canada’s recent decision in Fadali v. His Majesty the King, 2026 TCC 86   illustrates the importance of paragraph 123(1)(f) of the Excise Tax Act, R.S.C., 1985, c. E-15, which provides an exception to the definition...

Business vs. Adventure or Concern in the Nature of Trade “Adventure or concern in the nature of trade” is not defined in the  Excise Tax Act, R.S.C., 1985, c. E-15 (“ETA”). In Aviva Canada Inc. (formerly CGU Group Canada Ltd.) v. The Queen, 2006 TCC 57 , the Court held that nothing in the GST/HST scheme requires the phrase...

The "Business" Test in Happy Valley Farms Ltd. v. The Queen, 1986 CanLII 7434 (FC) If income is characterized as business income then 100% is subject to taxation. Only 50% of a capital gain is subject to taxation. Determining whether the business income characterization applies requires referring to the definition of a...

Swift v. The Queen, 2020 TCC 115 & Coates v. The Queen, 2011 TCC 74 & GST/HST In Ontario, for example, many taxpayers bought and/or renovated homes consecutively during the housing upturn. Consequently, it has been common for Canada Revenue Agency (“CRA”) to target the consecutive purchase and sale of 3 or 4 homes...

Exceptions to the CRA Flipping Rules for the Sale of New Houses The Canada Revenue Agency (CRA) has introduced flipping rules that apply to the sale of real estate. These rules aim to ensure that profits from the sale of properties are reported and taxed as business income rather than capital gains. However, CRA recognizes...

In response to the growing popularity of short-term rentals and their impact on housing availability, the Canadian federal government has introduced new tax regulations effective January 1, 2024. These rules aim to ensure compliance with local laws and promote the availability of long-term housing options. DENIAL OF EXPENSE DEDUCTIONS FOR...

The Proposed Residential Property Flipping Rule The Residential Property Flipping deeming rule introduced in the 2022 Federal Budget will not apply if the disposition of residential property is on account of a “life event”. Accordingly, it appears that Canada Revenue Agency (CRA)...