The appellant (the corporation) acquired the full legal ownership of two new residential properties for rental purposes and claimed the new residential rental property rebate (NRRPR) under s. 256.2. However, the builder had insisted that individuals be named in the purchase agreement, so that one of the corporation’s individual shareholders was so named, with the other two shareholders (her two parents) later being added to the agreement by amendment. The three shareholders signed a declaration of trust acknowledging that they were acquiring the properties for the benefit of the corporation. At the closing, the vendor was directed to transfer title to the corporation, which paid the purchase price out of its own funds.
In affirming the Minister’s position that the corporation was not eligible for the NRRPR because it was not the recipient of the supply of the two properties, McPhee J quoted s. 256.2(3)(a)(i) and the definition of recipient in s. 123(1) and stated (at para. 30):
Based upon the wording of the legislation set out above, it was [the shareholders] who signed the purchase and sale agreement, obliging them to pay the purchase prices for the Watermill properties. They were therefore the recipients of the supply.
He noted that Cheema (dealing with the new housing rebate under s. 254) was similar, and stated (at paras. 44-45):
Similar to section 254, subsection 256.2(3)(a) does not distinguish between beneficial and legal ownership, so it is of no consequence that the three related individuals acquired the Subject Properties as bare trustees of the Appellant. …
Similar to the Cheema decision, it is the relationship between the purchaser and the seller that is relevant to the entitlement to the NRRPR rebate, not the relationship between the co-purchasers.