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Ronald's Case Study - $25,000 Hst / Gst New Housing Rebate refunded

Gst / Hst New Housing Rebate

The Gst / Hst new housing rebate provides a partial refund of the Gst / Hst paid on newly constructed houses that are used as a primary residence. The new home owner, however, has to meet certain criteria to receive the rebate and the government does audit tax payers’ situations. Ronald was being audited, and the auditor wanted Ronald to repay $25,000 of the rebate that he had received.

Primary Residence Definition

One of the criteria is that the house must be a primary residence, not an investment property for example. The definition of primary residence is different from the principal residence deduction. Your primary residence is essentially the property that you consider to be your main residence. This is evidenced by address on public documents, length of stay, do you own other property, are you an experienced real estate investor, dates of utility connections, reasons for selling, gain or loss on sale etc. Whether you meet the definition is a question of fact and when presenting your case to the auditor you have to demonstrate that the property is the main residence.

Tax Doctors Canada Appeal The CRA Audit

Ronald had only lived in the home for a few months then sold the property. Because Ronald lived in the house for such a short period of time, CRA audited the rebate. We argued, with a twenty six page document, that the residence in question was Ronald’s primary residence. We also cited a number of court cases that supported Ronald’s situation. Consequently, the auditor concluded that Ronald was not required to repay the $25,000 Hst / Gst rebate. Congratulations Ronald!

Ronald made the correct decision by hiring Tax Doctors Canada for his tax filing needs. Let the certified accountants at Tax Doctors Canada also help you take control of all your tax filing needs and put you on the path to maximizing your income tax returns.

Tax Doctors Canada has 3 office locations in (by appointment only) in Toronto, Markham and Mississauga to serve you. You can also have one of our certified tax accountants assist you with your personal tax return requirements remotely from the comfort of your home utilizing Tax Doctors Canada's secure document transfer portal. We accept clients from Canada and worldwide.

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