Date: 20000714
Docket: 1999-3550-GST-I
BETWEEN:
RAY SULLIVAN,
Appellant,
and
HER MAJESTY THE QUEEN,
Respondent.
Reasons for Judgment
O'Connor, J.T.C.C.
[1] This appeal was heard at Toronto, Ontario on June 30, 2000.
ISSUE:
[2] The issue in the appeal is whether the Appellant is entitled to a GST new housing rebate ("NHR") in the amount of $3,080.97. The Minister of National Revenue ("Minister") disallowed the NHR because the Appellant filed his application for the NHR more than two years after he and his family first occupied the home ("home") in question which is located in Nichol Township, Ontario.
FACTS:
[3] The relevant facts are:
(a) The Appellant, his wife and family, first occupied the home on June 16, 1994 at which time it was substantially completed. However, the Township of Nichol only issued an Occupancy Permit on January 30, 1997.
(b) The Application for the NHR was received by the Minister on May 26, 1998.
SUBMISSIONS:
[4] The Appellant submits that the time for the two-year period to commence should be the date of the Occupancy Permit, namely January 30, 1997 and he filed his Application within two years from that date. He further submits that the period for his required filing of the Application should be four years from the date of occupation and that he filed his Application within that period of four years. The Respondent submits that the period is two years from the date the home was first occupied and that the Appellant's Application was received more than two years after the said date.
ANALYSIS AND DECISION:
[5] The relevant part of the Excise Tax Act is:
256(3) A rebate under this section in respect of a residential complex shall not be paid to an individual unless the individual files an application for the rebate within two years after the earliest of
(a) the day that is two years after the day the complex is first occupied as described in subparagraph (2)(d)(i),
(a.1) the day ownership is transferred as described in subparagraph (2)(d)(ii); and
(b) the day construction or substantial renovation of the complex is substantially completed.
Prior to the amendment mentioned below this provision read:
(3) A rebate shall not be paid under subsection (2) in respect of a residential complex to an individual unless the individual files an application for the rebate within two years after the earlier of
(a) the day the complex is first occupied as described in subparagraph (2)(d)(i) or ownership is transferred as described in subparagraph (2)(d)(ii), and
(b) the day construction or substantial renovation of the complex is substantially completed.
The portion of subsection 256(3) before paragraph (b) was amended by S.C. 1997, c. 10, s. 66(3), and is applicable to any rebate in respect of a residential complex for which an application is filed with the Minister of National Revenue on or after April 23, 1996 except where
(a) the residential complex was, at any time after the construction or substantial renovation thereof began and before that day, occupied as a place of residence or lodging;
(b) the construction or substantial renovation of the residential complex was substantially completed before that day; or
(c) the applicant, before that day, transferred ownership of the residential complex to a recipient of a supply by way of sale of the complex.
[6] The French version of paragraph 66(3)(a) is clearer than the English as it specifically states the amendment will not apply where the taxpayer occupied the home prior to April 23, 1996.
[7] Under former subsection 256(3), the period for filing an application for the rebate was two years after the earlier of occupying the home or substantial completion of construction or renovations. The Appellant is clearly beyond that period in the case at bar.
[8] We must therefore determine whether the amended subsection 256(3) applies to someone who was already occupying his home. The subsection states that a rebate shall not be paid unless the individual files an application within two years after the earliest of: (a) the day that is two years after the day the complex is occupied, (b) the day construction or substantial renovation of the complex is substantially completed. The change therefore related to the occupancy of the home, which started a four-year rather than a two-year clock running. However, substantial completion still starts a two-year clock and whichever clock runs out first sets the deadline.
[9] The amended subsection 256(3) was introduced by S.C. 1997, c.10, subsection 66(3). It states that the new provision is applicable to a rebate for which an application is filed on or after April 23, 1996 except where the residential complex was occupied before that day as a place of residence or lodging. It is true that the Appellant filed his application after April 23, 1996 but the Appellant cannot benefit from the amendment (i.e. four years as opposed to two) because his time period was already running as of June 16, 1994.
[10] Moreover, as substantial completion of the home had occurred as of June 16, 1994, the two year period for that situation was not altered by the amendment in 1997 and it is absolutely clear that the Appellant is well beyond the two year period commencing on June 16, 1994.
[11] Moreover, the date of the Occupancy Permit is immaterial as the evidence disclosed that the home was substantially completed as of June 16, 1994 and as the Appellant and his wife and family took occupation of the home on that date.
[12] Also, the jurisprudence is clear that neither the Minister nor this Court can, out of compassion or for any other reason, extend the two-year period.
[13] For all of the foregoing reasons the appeal regrettably must be dismissed.
Signed at Ottawa, Canada, this 14th day of July, 2000.
"Terrence P. O'Connor"
J.T.C.C.