What kinds of cases are you looking for?   
< Previous Case Next Case >

GST — home renovation was not substantial renovation

My client's home was owned by his management company and rented to him. The home was renovated and major changes and additions were made. The company erroneously claimed input tax credits on the renovations, and was audited. The CRA auditor proposed to assess the company for GST on the entire value of the home on the basis that there had been a "substantial renovation". My client was potentially facing a $70,000 assessment.

I visited the home and prepared a detailed analysis to show that the renovations did not meet the test of "substantial renovation", based on the definition in the legislation as well as recent case law and CRA published policy. To prove what renovations had been done, I prepared calculations showing what changes had been made to what rooms, and obtained Affidavits from several people familiar with the construction, such as the architect and general contractor.

I also determined that the company was entitled to more than 20% input tax credits for GST paid on the renovations, based on the use that the company made of the property.

All of this went into a 15-page letter to the auditor, plus detailed attachments and documentation.

Four months later, the auditor confirmed that he agreed with my submissions, and the company was assessed to deny only 80% of the input tax credits as per my proposal.

Problem solved!

(2006)