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GST — builder built home for personal use

My client built a new home to live in. He and his wife tried to sell their old, smaller home, but were unable to do so. He therefore sold the new home. Revenue Canada assessed my client for $40,000 of GST, interest and penalties, for failing to collect GST on the sale of the new home. This was done after auditing the client and receiving representations from his accountant.

At this point the client came to me. I filed a Notice of Objection that reviewed in detail the facts supporting a GST exemption. Specifically, since he had built the home solely as a personal residence, he was not required to collect GST. To convince the Revenue Canada appeals officer of these facts, I assembled and submitted extensive supporting documentation. I also provided a detailed analysis, based on Revenue Canada's own Interpretation Bulletin, to show that my client had not been engaged in business activity when he built the new home.

The appeals officer agreed and cancelled the $40,000 assessment.

Problem vanished!

(1996)