GalvinCPA&TAX

Securing a GST/HST New Housing Rebate in 2026 requires more than just filling out a form. The Canada Revenue Agency (CRA) and the courts look deep into your intent at the moment you signed the contract.

At Galvin CPA & TAX, we’ve analyzed four critical 2025 tax court cases that every new homeowner should know before applying for their rebate.

1. The “Life Happens” Exception: Lisi et al. v. The King

This case is a major win for taxpayers forced to sell quickly due to unforeseen circumstances.

• The Story: Two brothers purchased homes but sold them within months—one due to a health crisis (addiction) and the other due to relationship pressures with a girlfriend.
• The Ruling: The Court allowed their rebates because they “demolished” the CRA’s assumptions by proving a genuine intention to live there at the time of purchase.
• Key Lesson: A quick sale doesn’t automatically disqualify you if you can prove you genuinely intended to occupy the home as a primary residence from the start.

2. The “Credibility” Test: Paglia v. The King

Proving you live in a property involves more than just having a key; it involves showing your life is “centered” there.

• The Story: A buyer and his friend co-purchased a condo. They worked long hours in construction and slept there only several nights per week.
• The Ruling: The Court accepted their occupancy because their testimony was consistent and corroborated by elevator reservations, utility bills, and photos.
• Key Lesson: Even limited use by young owners balancing work can satisfy the “occupancy” requirement if supported by physical evidence.

3. The “Speculation” Red Flag: Elhav v. The King

The CRA is highly skeptical of “test arrangements” where a family member stays only briefly.

• The Story: Parents bought a Toronto condo claiming it was for their son Michael, who stayed for only three months before moving back home.
• The Ruling: The rebate was denied. The Court found Michael’s stay was “brief” and consistent with a trial, failing to meet the “settled residential intention” required when the contract was signed.
• Key Lesson: If the location doesn’t make sense for the occupant’s job or lifestyle, the CRA will likely view the intent as speculative.

4. Fact-Driven Success: Sharma v. The King

This case highlights how mundane details like “contents insurance” can win a court case.

• The Story: A couple sold their home after only two months because a job loss made the commute impractical.
• The Ruling: The Court allowed the appeal, noting that buying contents insurance and moving personal belongings strongly indicated a genuine intention to stay.
• Key Lesson: The bar for occupancy is “low,” but it must be backed by actions that align with the purchase of a long-term home.

Summary: Proving Your Primary Residence

Don’t let an audit sink your rebate. Contact Galvin CPA & TAX today for a pre-filing review of your occupancy evidence to ensure your “home base” status is ironclad.