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CRA Denied a GST/HST New Housing Rebate – But the Tax Court Disagreed

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When purchasing a newly built home in Canada, buyers may qualify for a GST/HST New Housing Rebate. However, as many taxpayers discover, the Canada Revenue Agency (CRA) often applies the rules strictly and denies claims — even when the taxpayer’s circumstances are reasonable.

A recent case, Osagie v. The King, 2025 TCC 114, illustrates how the Tax Court of Canada can provide relief when the CRA’s interpretation is too rigid.

Background

Mr. Osagie purchased a new condominium unit and applied for the GST/HST New Housing Rebate under section 254 of the Excise Tax Act.

  • The rebate requires that the purchaser or a close family member be the first occupant of the home.
  • Due to circumstances beyond his control, the unit was briefly rented out before he and his family could move in.
  • The CRA denied his rebate claim on the basis that he was not the “first occupant.”

The Tax Court’s Decision

The Tax Court allowed Mr. Osagie’s appeal. The judge emphasized:

  • The rebate provisions should be interpreted purposively, to encourage home ownership and occupancy.
  • Mr. Osagie’s intention was always to occupy the property as his family’s primary residence.
  • Temporary rental arrangements, especially in the context of pandemic-related disruptions, did not defeat his eligibility.

The Court concluded that the rebate was available and ordered the Minister to reassess accordingly.

Why This Matters

This decision highlights two key points:

  1. CRA decisions are not final — taxpayers have the right to appeal.
  2. Intention and context matter — courts may consider practical realities, not just strict technicalities.

Key Takeaway for Homebuyers

If your GST/HST New Housing Rebate has been denied, you may still have a strong case for appeal, particularly if your intention was to make the property your home but circumstances prevented immediate occupancy.

👉 If you have received a denial from CRA on your rebate or any other tax matter, contact us today. We can help you understand your rights and represent you before the Tax Court of Canada.