Legal Beat: Home renovation not substantial enough for rebate

After being denied a tax rebate for a home renovation, this Quebec taxpayer appealed. He had applied for a GST rebate through a program that enabled home owners to recoup some costs for work on a new residential complex or one that had undergone substantial renovation.

In this case, the cost of the renovation work totaled $45,910. The taxpayer appealed after his application for a GST rebate was turned down by the province’s Ministry of Revenue. The application was denied because most of the interior of the existing part of the residence was not renovated.

The taxpayer’s appeal was also dismissed. According to court transcripts, renovations to the basement could not be considered in determining whether major renovations had been completed because the basement was only partly completed. The additions to the entrance hall and basement, even if they were considered habitable areas, did not double the surface of habitable areas of the residence and more importantly did not create a new residential complex because the residence remained mostly intact.

Work carried out during the taxpayer’s major renovations fell within ordinary meaning of the definition of substantial renovations, and for the purposes of the ecoENERGY program. However, the definition of “substantial renovation” in s. 256(2) of the Excise Tax Act (Can.) is very restrictive, since it excludes work that should theoretically be considered major, such as work to foundation, exterior walls, interior support walls, floors, roof and stairs. Work to the building was not considered sufficient enough for the building to be viewed as “all” or “substantially all” removed or renovated.

 Source: OREA Ontario Real Estate Accosiation






  Yvonne Andersen
  Sales Representative


CENTURY 21 Miller Real Estate Ltd.
Brokerage Independently Owned and Operated
467 Speers Road,
Oakville, ON L6K 3S4
Office: 905.845.9180
Fax: 905.845.7674
Email: yvonne.andersen@century21.ca
Website: www.yvonneandersen.com





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