1351231 Ontario Inc. v. The King, 2024 TCC 37, aff'd 2025 FCA 53 -- summary under Subsection 206(2)

By services, 18 March, 2024

The Appellant used a condo unit for the first nine years after purchase for long-term residential rentals and then listed it on Airbnb and rented it out for a succession of short-term rentals (under 60 days and sometimes for only one night) before its sale.

D’Arcy J found that the change-in-use rule in s. 206(2) applied, by virtue of s. 141.1(3)(a), when the property was first listed on Airbnb (i.e., the doing of something in connection with the establishment of a commercial activity) (para. 46), so that there was a deemed acquisition by the Appellant of the property. Thus, for the purposes of applying the definition of residential complex, the only use after the property’s deemed acquisition was for making short-term rentals. S. 197 had no application because at the point in time of the listing, there was a 100% change in use.

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deemed change of use under s. 141.1(3)(a) when property 1st listed/ s. 197 applied on point-in-time basis
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