The appellant (“9158”), which had constructed a 14-storey apartment building, with two floors of commercial space and with underground parking, self-assessed itself under QSTA s. 225 (similar to ETA s. 191(3)) on the basis that there had been a self-supply on the residential component of the building on October 31, 2015 based on a fair market value of $11.1 million. The ARQ disputed this value, and assessed on the basis that there was a self-supply on that date based on an FMV of $15.3 million. 9158 then took the position that the time of the self-supply was on June 1, 2015, when 90% of the construction costs had been incurred, so that at that point (which was in an earlier reporting period that was now statute-barred) the building had reached substantial completion (and, presumably, the first unit had already been occupied).
In accepting a report of the ARQ valuator and before dismissing 9158’s appeal, Lareau JCQ stated (at paras. 37, 40, TaxInterpretations translation):
Mr. Vadnais' report, which contains a multitude of photographs, taken on August 5, 2015 … clearly indicates that 35 out of 88 units were not ready for rental. … The report also indicates that a significant portion of the underground parking garage was used to store materials and equipment such as, for example, bathroom vanities, kitchen countertops and equipment, etc. …
Although the rule of thumb of 90% of the costs incurred may be appropriate in the vast majority of cases, for formulating, without further effort, an equivalence between a specific percentage of costs incurred and the concept of a "substantially completed" building, this does not seem justified under these circumstances.