The appellants (the “siblings”) were adult siblings who, while living with their parents in Woodbridge, used funds mostly provided by their parents to acquire, in 2011 and in co-ownership, an existing home in Toronto for $1.65 million, tear it down, construct a new house (with a certificate of occupancy issued in July 2013) and, following an interim listing for sale in August 2013, ultimately sold the new house in April 2014 for $3.7 million.
Yuan J accepted the siblings’ testimony that they occupied the new house in late 2012 or the start of 2013, as corroborated by some invoices for furniture and bedroom sets and for electricity and gas. Regarding the exemption in Sched. V, Part I, s. 2 (for a sale of a residential property by a non-builder), this finding helped to support that the property was acquired for personal use rather than in the course of a business or an adventure in the nature of trade. On the other hand, if the siblings were builders who resided at the new house prior to the sale and the s. 191(1) self-supply rule did not apply to them due to the s. 191(5) exemption, the sale would be exempted pursuant to Sched. V, Part I, s. 3. If they were builders without the s. 191(5) exemption applying, then their occupation of the house as a residence prior to the start of the assessed reporting periods would attract GST/HST on a self-supply occurring at the time of such residential occupancy (which had not been assessed) - rather than at the time of the subsequent sale, which would be exempted under Sched. V, Part I, s. 4. Accordingly, given the occupancy finding, the sale was exempted under each alternative.
It thus was unnecessary to find whether the siblings were builders, and Yuan J noted uncertainty on this point given inter alia that around $1 million of the profit on the sale went to the siblings’ parents.