Can The CRA Deny Your New Housing Rebate Even If You Actually Used The Property? Yes! A Canadian Tax Lawyer’s Analysis Of Goncharova v. The King

Overview: Can the CRA Deny a New Housing Rebate Even If You Actually Used the Property?

Yes. A purchaser’s actual use of a newly acquired home does not, by itself, establish entitlement to the GST/HST New Housing Rebate. Under paragraph 254(2)(b) of the Excise Tax Act, the purchaser must have acquired the property for use as the purchaser’s, or a qualifying relation’s, primary place of residence at the time the purchaser became liable under the agreement of purchase and sale. Subsequent occupation can provide important evidence of that original intention, but it does not replace the statutory requirement that the qualifying intention exist at the relevant time.

That distinction was central in Goncharova v. The King, 2026 TCC 172. The taxpayer acquired a one-bedroom condominium of approximately 499 square feet in Etobicoke while her family continued renting a three-bedroom townhouse in Caledon. Although the family furnished the condominium, arranged Wi-Fi and insurance, changed some addresses, and presented evidence that they used the unit, the CRA denied the Ontario New Housing Rebate and the Court ultimately dismissed the taxpayer’s appeal.

The Court focused on whether the taxpayer had a clear and settled intention, when she assumed the purchase agreement, to make the condominium the family’s primary place of residence. A taxpayer’s stated intention is relevant, but the Court may test that statement against objective conduct and surrounding circumstances. In Goncharova, the continued rental of the Caledon townhouse, the children’s schooling, the family’s living arrangements, and the subsequent sale of the condominium all formed part of that factual analysis.

The case also illustrates the difference between the intention requirement in paragraph 254(2)(b) and the separate occupancy requirement in paragraph 254(2)(g). A purchaser may physically use or occupy a property without necessarily proving that it was acquired as the primary place of residence. Conversely, later events do not automatically negate a genuine original residential intention. The case law therefore requires an examination of the full factual record rather than reliance on any single factor such as a driver’s licence, utility account, furniture purchase, or subsequent sale.

“Purchasers should not assume that sleeping at a new property, furnishing it, or changing an address will by itself establish entitlement to the New Housing Rebate. The important question is whether the purchaser’s conduct and surrounding circumstances support a genuine and settled intention to make the property the primary place of residence at the relevant time,” says David J. Rotfleisch, Certified Specialist in Taxation Law (Law Society of Ontario).

Goncharova should also be read together with cases such as Talukdar v. The King, 2026 TCC 28, where a later sale and incomplete address or utility records did not defeat the rebate because the broader evidence supported genuine residential use. This confirms that a subsequent sale or imperfect documentation is not automatically fatal. Instead, the CRA and the Court will examine whether the evidence as a whole supports the required primary-residence intention. Goncharova was decided under the Tax Court’s Informal Procedure, and section 18.28 of the Tax Court of Canada Act provides that an Informal Procedure judgment is not to be treated as precedent. Goncharova is therefore best understood as a 2026 fact-specific application of established principles rather than as creating a new binding rule. A taxpayer facing a CRA denial of a New Housing Rebate may therefore benefit from consulting a top Canadian tax lawyer to assess whether the contemporaneous evidence supports the required intention and whether the CRA’s factual conclusions can be challenged.

Background: Why the CRA Denied the New Housing Rebate in Goncharova

The dispute in Goncharova arose from the taxpayer’s purchase of a new condominium unit at 251 Manitoba Street in Etobicoke, Ontario. The purchase price was $538,888. Because that amount exceeded the $450,000 threshold applicable to the federal New Housing Rebate under the provisions before the Court, the dispute concerned the Ontario New Housing Rebate, which is governed by section 256.21 of the Excise Tax Act and adopts the conditions in subsection 254(2).

The taxpayer and her husband had previously sold their family home in Innisfil and moved into a three-bedroom rental townhouse in Caledon. They had hoped to build a new family home on vacant land in Caledon East, but by the fall of 2021 they concluded that construction would take considerably longer than expected. The taxpayer then began looking for another property and, on November 16, 2021, she and her husband entered into an assignment agreement to acquire the Etobicoke condominium.

The condominium was a one-bedroom unit measuring approximately 499 square feet. The taxpayer testified that the family intended to use it as their primary residence until their planned home in Caledon could eventually be constructed. However, after possession was obtained in July 2022, the family continued renting the Caledon townhouse. Their furniture largely remained there, and both children continued attending schools near Caledon, about 42 and 53 kilometres from the Etobicoke condominium.

There was nevertheless evidence that the condominium was used by the family. The taxpayer purchased a queen-sized bed, a sofa bed, a table and chairs, and other household items. Photographs showed the children eating meals and using the building’s amenities, and the taxpayer also arranged Wi-Fi, insurance, and some address changes. Her husband changed his driver’s licence to the condominium address.

As is common with new Ontario condominiums, the family took interim occupancy in July 2022, before the purchase closed and title was transferred in December 2022. Approximately four months later, in April 2023, the property was listed for sale, and the sale closed in September 2023. In October 2023, the couple agreed to buy a home in Arthur, Ontario, and they stopped renting the Caledon townhouse only after that purchase closed in 2024. The taxpayer also testified that disturbances in the building, including noise and a later shooting, contributed to the decision to leave. However, the Court noted that the condominium had already been listed for sale before the shooting occurred.

The CRA denied the rebate by an assessment dated August 7, 2024, on the basis that the taxpayer had not established that the condominium was acquired for use as her family’s primary place of residence. Before the Court, the CRA relied on both paragraphs 254(2)(b) and 254(2)(g), but conceded the occupancy condition at the hearing and argued only the intention issue. The taxpayer was represented at the hearing by her husband rather than by a tax lawyer. The Court agreed. Although it accepted that the family had made some use of the condominium, it concluded that the Caledon rental continued to function as the family’s real home or “base of operations.” The continued rental, the children’s schooling, the family’s living arrangements, and the broader timeline collectively outweighed the evidence pointing toward the condominium as the primary residence.

The dispute therefore turned not on whether the taxpayer ever used the condominium, but on whether the surrounding evidence established the required primary-residence intention at the time she assumed the purchase agreement.

What Does “Primary Place of Residence” Mean for the New Housing Rebate?

Paragraph 254(2)(b) of the Excise Tax Act requires the purchaser, at the time the purchaser becomes liable under the agreement of purchase and sale, to acquire the property for use as the primary place of residence of the purchaser or a qualifying relation. The statutory focus is therefore on the purchaser’s purpose at that specific point in time, not merely on what happened after closing.

The case law describes the required intention as a clear and settled intention to make the property the purchaser’s primary residence. In Kniazev v. The Queen, 2019 TCC 58, the Court explained that the word “primary” suggests that the purchaser must intend to centre or arrange personal and family affairs around that property. The inquiry therefore goes beyond whether the purchaser planned to spend some time there or use the property occasionally.

A property may be a residence without being the taxpayer’s primary place of residence. For New Housing Rebate purposes, a secondary home, pied-à-terre, recreational property, or property acquired primarily for investment or resale does not satisfy the same statutory requirement merely because the purchaser occasionally stays there. The Court must determine whether the property was genuinely intended to function as the purchaser’s principal home.

The taxpayer’s own testimony about intention is relevant, but it is not conclusive. In Coburn Realty Ltd. v. The Queen, 2006 TCC 245, the Court recognized that the words “for use” create a purpose or intention test and that actual use may provide important evidence of what the purchaser intended when entering into the transaction. Subsequent conduct can therefore corroborate or undermine the taxpayer’s stated intention, even though the statutory test remains focused on the earlier time when liability under the agreement was assumed.

This distinction is important because there is no single factual indicator that establishes a primary residence. Courts may consider where the taxpayer and family actually lived, whether another home remained available, where children attended school, how much time was spent at the property, whether furniture and personal belongings were moved, whether the property was rented or listed for sale, and whether the purchaser’s conduct before and after closing was consistent with the stated intention. The weight given to each factor depends on the entire factual context.

For a purchaser facing a CRA challenge, the practical question is therefore not simply whether the property was used as a residence at some point. The stronger question is whether the objective evidence supports a settled intention, at the relevant statutory time, to make that property the purchaser’s or qualifying relation’s primary place of residence. An experienced Canadian tax lawyer can help assess whether the contemporaneous evidence supports that requirement and whether the CRA has placed too much weight on any single adverse fact.

How Does the Court Determine a Purchaser’s Real Intention?

When entitlement to a New Housing Rebate depends on whether a property was acquired for use as a primary place of residence, the Court does not rely solely on the purchaser’s later statement of intention. The purchaser’s testimony is relevant, but it must be assessed against objective conduct and the surrounding circumstances existing before and after the agreement was entered into.

In Coburn Realty, the Court recognized that the words “for use” create a purpose or intention test. Actual use of the property may therefore provide important evidence of the purchaser’s original purpose. In Goncharova, the Court also relied on Charlebois v. The King, 2025 TCC 76, where the Court explained that although the statutory wording calls for a subjective examination of the purchaser’s purpose, an objective examination of the taxpayer’s conduct is more revealing. That approach follows Symes v. Canada, [1993] 4 SCR 695, in which the Supreme Court of Canada directed courts to look for objective manifestations of purpose, assessed on the totality of the circumstances. Sozio v. The Queen, 2018 TCC 258 identifies various indicia relevant to intention, and their weight depends on the entire factual context.

Relevant evidence may include where the purchaser and family actually lived, whether another property remained available as a family home, how much time was spent at the new property, where children attended school, whether furniture and personal belongings were moved, and whether the purchaser changed mailing, government, insurance, or utility information. Subsequent rental activity, resale activity, and the timing of any decision to leave the property may also assist in determining whether the original primary-residence intention was genuine.

No single factor is necessarily decisive. For example, Talukdar v. The King, 2026 TCC 28 demonstrates that a failure to change every government address or produce every utility record does not automatically defeat the rebate where credible evidence otherwise establishes genuine residence. Conversely, Osman v. The King, 2025 TCC 65 illustrates that limited physical presence, weak corroboration, continued family ties to another home, and conduct consistent with rental or resale can collectively undermine the taxpayer’s stated intention.

That approach was central in Goncharova. The taxpayer pointed to Wi-Fi, insurance, furniture, address changes, photographs, and some family use of the condominium. The Court nevertheless considered those facts together with the continued rental of the Caledon townhouse, the children’s schools, the location of the family’s belongings, and the broader timeline. The positive residential indicators did not outweigh the evidence suggesting that the Caledon property continued to function as the family’s primary home.

The practical lesson is that primary-residence intention is established through the overall consistency of the evidence. A purchaser may have several facts supporting residential use, but the Court will consider whether the purchaser’s conduct as a whole is consistent with a genuine and settled intention to make the property the centre of personal and family life.

Why Did the Court Reject the Taxpayer’s Primary-Residence Explanation in Goncharova?

The Court did not reject the taxpayer’s position because of any single fact. Instead, it considered the entire factual record and concluded that the evidence was not consistent with a clear and settled intention to make the Etobicoke condominium the family’s primary place of residence when the purchase agreement was assumed.

One of the most important factors was the family’s continued rental of the three-bedroom Caledon townhouse. The taxpayer and her husband did not give up that property after taking possession of the condominium. Most of the family’s furniture remained there, and the Court was not persuaded that the Caledon property was retained merely for storage or occasional use. Instead, the evidence suggested that it continued to function as the family’s practical home.

The children’s schooling also weighed heavily in the analysis. The taxpayer’s daughter attended a school located close to the Caledon rental, while her son attended a high school substantially closer to Caledon than to the Etobicoke condominium. The Court considered those arrangements difficult to reconcile with the position that the condominium had become the family’s primary residence.

The size and configuration of the condominium were also relevant, but not determinative. The Court expressly acknowledged that a family of four with two small dogs could, in principle, live in a one-bedroom unit of approximately 500 square feet. The difficulty was plausibility, not possibility. Given that the family had left a long-time home in Innisfil, moved into a three-bedroom townhouse as an interim stop, and kept renting it until 2024, the Court found the taxpayer’s evidence “too implausible.”

Two further points weakened the taxpayer’s explanation. The couple bought the condominium without mortgage financing, so there was no financial reason for the family to squeeze into a small unit. The Court also could not accept that the condominium was attractive because it was close to Pearson Airport, where the taxpayer’s husband worked as a pilot, when living there would have drastically increased the daily driving distance to the children’s schools.

The Court also considered the timing of the subsequent sale. The condominium closed in December 2022 and was listed for sale in April 2023. Although the taxpayer referred to disturbances in the building and a later shooting as reasons for reconsidering the property, the Court noted that the unit had already been listed before the shooting occurred. That timing weakened the argument that the shooting explained the decision to leave.

At the same time, the Court did not ignore the evidence supporting residential use. The taxpayer had arranged Wi-Fi and insurance, changed some mailing information, furnished the unit, and presented photographs showing family use. Her husband also changed his driver’s licence address. The Court nevertheless gave this evidence limited weight, observing that the furniture could just as easily serve as staging furniture, and noted that a water utility bill for the Caledon rental supported the conclusion that the townhouse remained the family’s base of operations. The problem was that those facts, when weighed against the continued Caledon rental, school arrangements, family living pattern, and sale timeline, did not establish that the condominium was the family’s primary place of residence.

The broader point is that a CRA denial of a New Housing Rebate may turn on the overall coherence of the taxpayer’s evidence. A taxpayer can point to several facts showing some residential use and still lose if the surrounding circumstances indicate that another property remained the true centre of family life.

Does a Later Sale Automatically Disqualify a New Housing Rebate?

No. Selling a property after closing does not automatically disqualify a purchaser from the GST/HST New Housing Rebate. The statutory inquiry under paragraph 254(2)(b) remains focused on the purchaser’s intention when liability under the agreement of purchase and sale was assumed. A subsequent sale may be relevant evidence of that earlier intention, but it is not, by itself, determinative.

Talukdar provides an important contrast with Goncharova. In that case, the taxpayer later sold his condominium, had not changed all government addresses, and could not produce every utility record. Nevertheless, the Court accepted that the taxpayer and his family had genuinely moved into the condominium, brought furniture with them, slept there most or all nights for approximately 13 months, and had not rented the unit to anyone else. The later sale therefore did not establish that the original acquisition had been made for investment or resale purposes.

The comparison with Goncharova is significant. There, the problem was not simply that the condominium was eventually sold. The unit was listed only a few months after closing, while the family continued renting the Caledon townhouse and maintaining important aspects of family life there. The Court considered the sale together with the continued rental, the children’s schooling, the family’s belongings, and the overall timeline.

The timing and explanation for the sale can therefore matter. If a purchaser genuinely intended to make the property a primary residence but later sold because of an unexpected change in circumstances, the sale may be consistent with the original qualifying intention. By contrast, an early listing or resale may undermine the taxpayer’s position where it fits with other evidence suggesting that the property was never intended to become the purchaser’s primary home.

This distinction also reinforces why courts examine objective evidence rather than applying a fixed holding-period rule. There is no single minimum period of ownership identified in these authorities that automatically establishes or defeats the rebate. The question is whether the taxpayer’s conduct before and after closing supports the required intention at the relevant statutory time. Lisi v. The King, 2025 TCC 106 makes the same point from the taxpayer’s side. Two brothers each bought a new home in Kleinburg, Ontario and sold within months, and the CRA denied both rebates on the strength of the quick resales.

The Tax Court of Canada allowed the appeals, finding on the credibility of the testimony and the steps actually taken toward occupancy that each brother had intended to live in his property when the agreement of purchase and sale was signed. Lisi is therefore the mirror image of Goncharova: in both cases the property was sold soon after closing, and in both the outcome turned on whether the surrounding evidence matched the taxpayer’s stated intention at the statutory time rather than on the sale itself.

A purchaser facing a CRA challenge should therefore be prepared to explain not only when the property was sold, but also why the decision to sell arose and whether contemporaneous evidence supports that explanation. An experienced Canadian tax lawyer can help distinguish a genuine later change of circumstances from facts that the CRA may characterize as evidence of an original investment or resale purpose.

Can You Still Qualify If You Did Not Change Every Address or Utility Account?

Yes. A purchaser does not automatically lose entitlement to the GST/HST New Housing Rebate simply because every government address, utility account, or mailing record was not changed immediately. Those records can be important evidence of primary-residence intention, but the case law treats them as evidentiary factors rather than absolute statutory requirements.

Talukdar is particularly helpful on this point. The taxpayer had not changed his address with several government agencies and could not produce all utility records. The Court nevertheless accepted the rebate because, as discussed above, the broader evidence showed that the family had genuinely lived in the condominium.

Gorgis v. The King, 2024 TCC 109 provides another useful example. The taxpayer retained significant family and business connections elsewhere, stayed at the purchased property only part of the week, and had delayed some address changes. Even so, the Court accepted that the property was his primary place of residence because the evidence as a whole supported genuine residential use and a settled intention to treat the property as his principal home.

The opposite lesson appears in Goncharova. There, the taxpayer had actually taken several formal steps that supported residential use. Wi-Fi and insurance were arranged, some mailing addresses were changed, and her husband changed his driver’s licence to the condominium address. The Court nevertheless concluded that those indicators did not outweigh the continued Caledon rental, the children’s schooling, the family’s belongings, and the broader living arrangements. The Court itself acknowledged the apparent tension: in some cases the absence of such steps counts against a purchaser, while in others their presence does not tip the balance in the purchaser’s favour.

The practical point is that address changes, utility records, insurance, mail, school records, and similar documents should be viewed together. Their absence may weaken a claim, but their presence does not automatically prove entitlement either. What matters is whether the full factual record is consistent with a genuine and settled intention to make the property the purchaser’s primary place of residence.

For a taxpayer facing a CRA denial, an experienced Canadian tax lawyer can help assess which missing documents are actually significant and whether the remaining contemporaneous evidence is strong enough to establish the required primary-residence intention.

What Is the Difference Between Intention and Actual Occupancy?

The New Housing Rebate rules distinguish between a purchaser’s intention to use the property as a primary place of residence and the separate requirement concerning actual first occupancy. These requirements arise under different provisions of subsection 254(2) of the Excise Tax Act and should not be treated as interchangeable.

Paragraph 254(2)(b) focuses on the purchaser’s intention at the time the purchaser becomes liable under the agreement of purchase and sale. The question is whether, at that time, the property was being acquired for use as the purchaser’s, or a qualifying relation’s, primary place of residence. Later conduct may help prove or disprove that original intention, but the statutory timing remains fixed at the point when liability under the agreement was assumed.

Paragraph 254(2)(g), by contrast, concerns who first occupies the property after substantial completion. In Osagie v. The King, 2025 TCC 114, the Court treated the primary-residence intention requirement and the actual occupancy requirement as separate conditions. A purchaser may therefore satisfy the intention test and still fail the occupancy requirement if the property is first occupied in a manner that does not satisfy the statute.

Actual occupancy also requires more than merely taking possession or making occasional use of the property. The authorities indicate that placing a mattress or a few personal items in the home, sleeping there sporadically, or using the property temporarily may not be enough to establish occupation as a genuine place of residence. In Osman v. The King, 2025 TCC 65, the Court emphasized that occupancy must have an element of permanence and cannot be merely temporary or transitory.

That standard has since been applied more flexibly. In Sharma v. The King, 2025 TCC 145, the taxpayer and her husband spent limited time at a newly built Guelph townhouse, rarely cooked there, never did laundry there, and sold the property roughly three months after taking possession. The Tax Court of Canada nevertheless allowed the rebate, holding that paragraph 254(2)(g) requires occupation as a place of residence rather than as the primary residence, and that personal belongings on site, the absence of any other residence during the relevant period, and occasional overnight stays satisfied the occupancy condition.

Paglia v. The King, 2025 TCC 148 reached the same result where two purchasers moved furniture into a condominium, stayed several days each week, and leased the unit about eleven months later, the Court holding that time spent at a parent’s home did not negate an intention to use the condominium as a place of residence. Read together, these decisions suggest that the occupancy threshold is lower than the permanence language alone implies, which may explain why the Court in Goncharova described the CRA’s concession on paragraph 254(2)(g) as puzzling rather than treating the point as settled.

This distinction helps explain why evidence of actual use can be important without being decisive. A purchaser who genuinely moves into the property, brings furniture, sleeps there regularly, and centres ordinary family life there may strengthen both the occupancy analysis and the evidence of original intention. Conversely, occasional presence at the property may satisfy neither requirement if the surrounding facts show that another home continued to function as the purchaser’s true primary residence.

In Goncharova, the CRA conceded the occupancy requirement, so the Court did not decide it. The Court nevertheless found the concession “puzzling,” since occupancy as a place of residence “involves more than what likely occurred here,” citing Sindhi v. The Queen, 2023 TCC 102, Kniazev, and Salac v. The King, 2026 TCC 153. The decision should therefore not be read as a finding that the family’s limited use of the condominium satisfied paragraph 254(2)(g).

The practical lesson is that intention and occupancy must be analyzed separately. Evidence of one may support the other, but neither automatically proves the second statutory requirement.

Can Unexpected Events Excuse Failure to Occupy the Property?

In limited circumstances, an unexpected event may explain why a purchaser who originally intended to make a property a primary residence did not ultimately satisfy the first-occupancy requirement. The key distinction is that a later event may potentially excuse non-compliance with paragraph 254(2)(g), but it cannot create the primary-residence intention required by paragraph 254(2)(b) if that intention did not exist when the purchaser became liable under the agreement.

Osagie illustrates this narrow principle. The Court accepted that the taxpayer had the required primary-residence intention when the agreement was entered into, but subsequent events prevented the family from becoming the first occupants as originally planned. The circumstances included construction delays, school-year timing, pandemic-related health concerns, reduced employment income, and the financial burden associated with maintaining two properties.

The frustration analysis is fact-specific. The event must be unforeseeable, outside the purchaser’s control, and sufficiently compelling that the purchaser effectively had no real choice but to depart from the original residential plan. Osagie does not establish a general exception for financial hardship, inconvenience, COVID-related circumstances, or a temporary rental before moving into the property.

Because Osagie was also decided under the Tax Court’s Informal Procedure, section 18.28 of the Tax Court of Canada Act means that it is not precedent. The decision is therefore best treated as a fact-specific illustration of how frustration may be argued in this context, rather than as a generally applicable statutory exception to the occupancy requirement.

Gaitanis v. The King, 2025 TCC 186 places an important limit on that reasoning. A later financing problem, sale, or other intervening event cannot cure the absence of the qualifying intention at the time the agreement was entered into. Frustration may explain why a taxpayer with a genuine initial residential intention failed to occupy the property as required, but it cannot manufacture that intention after the fact.

Similarly, Loureiro v. The King, 2024 TCC 113 shows that an ordinary change of plans is not necessarily frustration. There, the purchasers were able to move into the condominium but had chosen another property as their primary home. The relevant circumstances therefore reflected a change in preference rather than an external event that made the intended occupancy effectively impossible.

That distinction is relevant to Goncharova. The taxpayer referred to disturbances in the condominium building and a later shooting as reasons for reconsidering the property. However, the unit had already been listed for sale before the shooting occurred. The Court therefore did not accept the shooting as an event explaining the earlier decision to sell or as evidence capable of establishing the required original primary-residence intention.

The practical point is that an unexpected event may be relevant only where the taxpayer can first establish a genuine qualifying intention and then show, with contemporaneous evidence, that an external event materially prevented the anticipated residential use.

The table below summarizes how Goncharova compares with the other New Housing Rebate cases discussed in this article.

Together, these cases show that the outcome rarely turns on a single document. The Court looks at whether the family’s actual pattern of life matches the stated intention.

What Do the Current 2026 New Housing Rebate Rules Mean for Buyers?

Goncharova concerned an Ontario New Housing Rebate claim arising from a purchase made under the earlier statutory framework. The current rules are broader in some respects, particularly for qualifying first-time home buyers, so the decision should not be read as a complete statement of every rebate now available in 2026.

The rebate landscape has since changed substantially. Parliament added subsection 254(2.1) of the Excise Tax Act, a separate and much larger rebate for qualifying first-time home buyers, and Ontario has introduced a matching provincial enhancement, each with its own thresholds, signing windows and phase-out ranges. Those amounts and deadlines are set out in full in our complete guide to the GST/HST New Housing Rebate and are not repeated here.

What matters here is that the primary-residence requirement survives the change: subsection 254(2.1) builds on the existing conditions, and paragraph 254(2.1)(e) additionally requires the purchaser personally to be the first individual to occupy the home, which makes a frustration argument of the kind accepted in Osagie harder to run under the first-time home buyers’ rebate. The evidentiary principles illustrated by Goncharova therefore apply with equal force under the new regime.

The practical point is that purchasers should not rely on older rebate thresholds or assume that Goncharova describes the full 2026 regime. The applicable rules depend on factors such as the date of the agreement, purchase price, first-time home buyer status, occupancy, and whether the federal or Ontario component is being claimed. An experienced Canadian tax lawyer can help determine which rebate regime applies before addressing whether the primary-residence evidence satisfies the statutory test.

What Evidence Should a Purchaser Keep Before a CRA Tax Audit?

A purchaser claiming a GST/HST New Housing Rebate should preserve contemporaneous evidence showing that the property was genuinely intended to become the purchaser’s, or a qualifying relation’s, primary place of residence. Because the Court may compare a taxpayer’s stated intention with objective conduct and surrounding circumstances, records created at the time of the purchase and move can be particularly important if the CRA later challenges the rebate.

Useful evidence may include the agreement of purchase and sale, documents showing the sale or termination of a former residence or lease, moving invoices, furniture purchases, insurance records, utility accounts and consumption, internet service, address changes, school registrations, employment or commuting arrangements, and correspondence discussing the planned move. These documents do not operate as a fixed checklist, but together they may help establish whether the purchaser actually intended to centre personal and family life around the new property.

Evidence concerning another residence can be especially important. If the purchaser continues to own or rent another home, the taxpayer should be prepared to explain why that property remained available and whether it continued to function as the family’s real home. In Goncharova, the continued Caledon rental, the location of the children’s schools, and the family’s broader living arrangements were more persuasive than some of the formal indicators connecting the taxpayer to the condominium.

Taxpayers should also preserve evidence explaining any later change of plans. A subsequent sale, delayed move, or temporary use of another property does not automatically defeat the rebate, but the timing and reason for the change may become important. Contemporaneous emails, medical or employment records, financing documents, construction-delay correspondence, or other records may help distinguish a genuine unforeseen change in circumstances from facts suggesting that the property was never intended to be the primary residence.

Cases such as Talukdar also show that missing documentation is not necessarily fatal where credible evidence and the overall factual circumstances support genuine residential use. Conversely, Osman illustrates that weak corroboration, family arrangements centred elsewhere, limited physical presence, and conduct consistent with rental or resale may collectively undermine the claim.

“Taxpayers should build the evidentiary record while the move is actually happening, not after the CRA has denied the rebate. School records, moving arrangements, utilities, insurance, address changes and contemporaneous correspondence can help demonstrate whether the purchaser genuinely intended to make the property the primary place of residence at the relevant time,” says David J. Rotfleisch.

Where the CRA challenges a New Housing Rebate following a CRA tax audit, an experienced Canadian tax lawyer can assess whether the available documents and surrounding facts are consistent with the statutory primary-residence requirement and whether the CRA has placed too much weight on any single adverse factor.

Takeaway: What Goncharova Means for New Housing Rebate Claims

Goncharova confirms that entitlement to the GST/HST New Housing Rebate depends on more than proving that the purchaser spent time at the property or took some steps consistent with residential use. The central question under paragraph 254(2)(b) is whether, when the purchaser became liable under the agreement of purchase and sale, there was a genuine and settled intention to use the property as the purchaser’s or a qualifying relation’s primary place of residence.

The purchaser’s own statement of intention is relevant, but it is not conclusive. Courts may examine objective evidence such as where the family actually lived, whether another home remained available, where children attended school, how personal belongings were distributed, whether the property was rented or listed for sale, and whether the overall conduct was consistent with the property becoming the centre of family life.

No single factor automatically determines the result. Talukdar shows that missing utility records, incomplete address changes, or a later sale do not necessarily defeat the rebate where the broader evidence supports genuine residential use. By contrast, Osman and Goncharova illustrate how continued family ties to another home, limited corroboration, short-term or inconsistent use, and resale-related conduct can collectively undermine the taxpayer’s position.

The case law also draws an important distinction between initial intention and actual occupancy. Paragraph 254(2)(b) addresses the purchaser’s purpose when liability under the agreement arises, while paragraph 254(2)(g) deals with first occupancy after substantial completion. Evidence of one may support the other, but the two requirements remain legally distinct.

A later change of circumstances may also matter, but only within limits. Osagie indicates that genuinely unforeseeable events outside the purchaser’s control may explain failure to satisfy the first-occupancy requirement, while Gaitanis confirms that later events cannot create a primary-residence intention that did not exist when the agreement was entered into.

The same evidentiary pattern runs through Xian v. The King, 2026 TCC 122, decided earlier in 2026, where the Court again measured a purchaser’s stated primary-residence intention against the documentary record rather than against the purchaser’s later account of it. Read together with Goncharova, the two 2026 decisions show the Tax Court applying a consistent standard of proof to primary-residence claims.

The practical lesson is that New Housing Rebate disputes are highly fact-dependent. Taxpayers should preserve contemporaneous evidence showing where they intended to live, how they planned the move, what happened to any former residence, and why any subsequent change in plans occurred. The strength of the overall evidentiary record will often matter more than any single document or formal address change.

“Goncharova shows that the Tax Court tests a primary-residence claim against common sense. Where a family keeps a larger home, and the children’s schools stay near it, a few furniture receipts and address changes will rarely outweigh the pattern of everyday life,” says David J. Rotfleisch.

Pro Tax Tips: Protecting a New Housing Rebate Claim Before a CRA Dispute

Taxpayers should document their primary-residence intention while the purchase and move are actually taking place. The strongest evidence is usually contemporaneous evidence showing how the purchaser intended to organize personal and family life around the property, including moving arrangements, school registrations, utilities, insurance, correspondence, and what happened to any previous residence. Later explanations may still be relevant, but they are more persuasive when supported by records created before a CRA dispute arose.

A purchaser should not rely too heavily on formal indicators such as changing a driver’s licence, mailing address, or utility account. Those facts can help, but Goncharova demonstrates that they may carry limited weight where the broader evidence shows that another property continued to function as the family’s real home. Conversely, Talukdar shows that incomplete address changes or missing utility records do not automatically defeat a rebate where the overall evidence supports genuine residential use.

Where the purchaser continues to own or rent another home, that fact should be addressed directly. The taxpayer should preserve evidence explaining why the other property remained available, how frequently it was used, where family members actually lived, and whether the new property truly became the centre of personal and family affairs. Leaving these facts unexplained may allow the CRA to argue that the new property functioned only as a secondary residence or temporary accommodation.

If circumstances change after the purchase, taxpayers should preserve evidence showing exactly when and why the change occurred. A later sale, delayed move, financing problem, employment change, health issue, or unexpected family event may be relevant, but the evidence should demonstrate that the change arose after a genuine qualifying intention already existed. Osagie and Gaitanis illustrate why a later event may explain failed occupancy but cannot create an initial primary-residence intention that was absent from the outset.

A taxpayer facing a CRA tax audit or CRA denial of a New Housing Rebate should also review the CRA’s factual assumptions rather than focusing only on the statutory wording. School records, commuting distances, rental arrangements, resale timing, occupancy evidence, and continued use of another property may become central to the dispute. An experienced Canadian tax lawyer can help identify which facts are genuinely significant and whether the CRA has drawn conclusions that are inconsistent with the complete evidentiary record.

Taxpayers should also watch the filing deadline. A New Housing Rebate application generally must be filed within two years after ownership is transferred to the purchaser.

Frequently Asked Questions (FAQs): GST/HST New Housing Rebates and Primary-Residence Intention

Can the CRA deny my New Housing Rebate even if I actually lived in the property?

Yes. Actual use or occupancy is relevant, but it does not automatically establish entitlement to the rebate. Under paragraph 254(2)(b) of the Excise Tax Act, the purchaser must have acquired the property for use as the purchaser’s, or a qualifying relation’s, primary place of residence when the purchaser became liable under the agreement of purchase and sale.

What does “primary place of residence” mean for the New Housing Rebate?

The case law requires more than an intention to use the property occasionally or temporarily. The purchaser must have a clear and settled intention to make the property the principal home around which personal and family affairs are centred.

When is my intention to use the property as a primary residence tested?

The relevant time is when the purchaser becomes liable under the agreement of purchase and sale. Later conduct may help prove or disprove what the purchaser intended at that time, but subsequent events do not replace the statutory timing requirement.

Does selling the property shortly after closing automatically disqualify me?

No. A subsequent sale is evidence that may be considered, but it is not automatically fatal. In Talukdar, the rebate was allowed despite a later sale because the broader evidence showed that the family had genuinely moved into and used the condominium as a residence.

Do I have to change my driver’s licence, CRA address, and all utility accounts to qualify?

Not necessarily. Address changes and utility records can support a claim, but they are evidentiary factors rather than automatic statutory requirements. Talukdar shows that missing records or unchanged government addresses can be overcome by credible evidence of genuine residential use.

Can I still qualify if I own or rent another home?

Possibly, but the existence of another residence can become highly relevant. The Court may examine which property actually functioned as the purchaser’s principal home, where the family lived, where children attended school, and how the taxpayer divided time and personal affairs between the properties. In Goncharova, the continued Caledon rental was an important factor weighing against the rebate claim.

Does sleeping at the property occasionally count as occupancy?

Occasional or sporadic use may not be enough. The authorities distinguish genuine residential occupation from temporary or transitory presence. In Osman, the Court emphasized that merely taking possession, placing some items in the home, or sleeping there sporadically may not establish qualifying occupancy.

Can an unexpected event excuse me from moving into the property?

In limited circumstances. Osagie indicates that an unforeseeable event outside the purchaser’s control may potentially excuse failure to satisfy the first-occupancy requirement where the purchaser had no real choice. However, a later event cannot create the original primary-residence intention required under paragraph 254(2)(b).

What evidence should I keep to prove primary-residence intention?

Relevant evidence may include moving records, termination or sale of a former residence, furniture purchases, utilities, insurance, school registrations, government and mailing address changes, employment or commuting records, and contemporaneous correspondence showing the planned move. No single document is necessarily conclusive, so the overall consistency of the record is important.

How long do I have to apply for the New Housing Rebate?

An application generally must be filed within two years after ownership of the home is transferred to the purchaser. Purchasers should confirm the deadline that applies to their specific rebate and transaction.

Does the first-time home buyers’ GST/HST rebate have stricter occupancy rules?

In one important respect, yes. Under paragraph 254(2.1)(e) of the Excise Tax Act, the purchaser must personally be the first individual to occupy the home after substantial completion. Evidence of a genuine move-in and ongoing residence is therefore particularly important for first-time home buyers.

What should I do if the CRA denies my New Housing Rebate?

The taxpayer should review both the statutory requirements and the factual basis for the CRA’s denial. Particular attention should be given to the timing of the purchaser’s intention, actual occupancy, the use of any other residence, and whether the CRA has placed too much weight on one adverse fact. An experienced Canadian tax lawyer can assess whether the evidence supports an objection or further appeal. A CRA denial is not the final word; our commentary on Simonetta v. The King describes a purchaser who successfully recovered a denied rebate.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.