CRA denies my GST new housing rebate? Valid?

[Gh0st]

I was denied my GST New Housing Rebate and I have an inquiry.

I purchased a presale in Jan 2016. I was promised it would complete in Jan 2018.

It was delayed significantly and I ended up moving in February 2019.

This was my first home that I saved up for and planned to live here for 3-5 years until I was ready to start a family and upgrade. Around June 2019 my mother (widow) was seriously ill and with no local relatives, I decided to sell my home to move closer to my mom.

I now live 2 blocks from her and able to take her to all her appointments and to just be around.

CRA says that I only lived in my place for about 5 months and that it was too short that their view is my intention wasn't to live there as a principal residence - since I now live in a bigger space than before.

I told them just because I moved to a bigger space doesn't disqualify me. I had unforeseen circumstances (mom's illness) that forced me to take quick action. My original intent was to purchase my first home and to move in 2018, however the developer had significant and abnormal delays that forced me to move in much later than anticipated. Still, I went through with the purchase and moved in - changed all of my addresses and lived and operated there as my principal residence until I received news of my mom's illness. It was then that I had to sell the property.

I reiterated the fact that if I had any intention of being an investor I would have sold my pre-sale during the peak of 2017-2018 without having to wait through the delay and pull a mortgage if my true intentions weren't to live there.

CRA's position is that I moved because I wanted a bigger home and to start a family and that it wasn't due to loss of earnings, job loss, or job relocation. I told them people move for a variety of reasons and the 3 reasons above cannot be the only criteria for which people move within the first year of occupying a home. I told them I need to progress in life and I do want a family, that having a bigger space now is just a bonus but I originally bought to live, which I did, and I originally sold because my mother got ill. Whether or not I profited on the property is irrelevant to the fact that I purchased the home to live in, and I did.

Sorry long post but instead of accepting their denial over the phone, I told them I will not accept it without further revision. He accepted my response and will take it to the review team and call me tomorrow. I don't want to have to appeal but I need help making my case stronger, if possible. I gave my honest answers and I felt they were used against me in this conversation quite heavily. I made sure that I was operating within the criteria of the rebate and to have them tell me my truth is bullshit.

TL;DR - I need help against CRA. They are calling me tomorrow with a verdict. *Just to clarify this is pertaining to GST New Housing Rebate and not capital gains tax*

[punkwax]

From what I understand, they’ll usually let people get away with it once if the reasoning is legit, which it seems yours was.

They just don’t want to allow people to flip homes with tax free capital gains unless it’s their primary residence for at least a year..

Good luck but I think you’ll be fine.

[Traum]

Based on a number of run-ins that a close friend of mine had with CRA, their final word is exactly that -- final. You can complain and present them with the most legitimate reasons in the world, but if they aren't buying it, they aren't buying it. The only remaining option would then be to sue, but that will probably turn out to be more expensive than whatever it is that they are making you pay.

As a result of this, my friend hated the CRA's guts with a vengence.

Good luck with their decision tomorrow.

[Gh0st]

Fuck. I always get fucking burnt by CRA - no matter how diligent I am in doing my taxes, submitting documents, record keeping, ect. I was (and still am) willing to fucking produce my mom's medical records that correspond in timing with my move.

Thank you so far for the advice. I welcome more thoughts and perspectives on this matter. $5500 GST New Housing Rebate is the amount I am eligible for but being denied. (not a capital gains tax issue)

-- another isolated incident years ago

"I bought my SUV from a stockbroker at his vacation home in the hills of the Okanagan. He wanted more garage space and wanted to get rid of his 5-year-old Infiniti FX.

Dude was extremely wealthy. Huge house in a gated community, Range, Audis, Toys he had it all. He took 10k cash for the vehicle - didn't even count the money. We went to superstore and got questioned by the broker for a LONG time about why the vehicle was heavily undervalued. We didn't have any explanation other than the seller saying that's all he wanted and didn't care about the vehicle.

Fast forward a few months I get slapped with a 1500 dollar tax bill and a telephone call from big brother. I was forced to pay 1500 unless I could prove something was wrong with the vehicle. I just paid the 1500.

I drove the vehicle for 6 years before selling it for 10k. I did lose 1500 on the vehicle from that tax bill."

[fsy82]

I highly suggest you Appeal the decision. Usually when that happens a senior agent will take over the file and ask for more documentation to backup your claim. As a professional in the field for the last 20 years you should have no issue of having the original judgement reversed.

[Ulic Qel-Droma]

Originally Posted by Gh0st

Fuck. I always get fucking burnt by CRA - no matter how diligent I am in doing my taxes, submitting documents, record keeping, ect.

bro, the CRA's only job is to burn people...

[Anjew]

low hanging fruit though. catch some real dodgers? that would require some level of intelligence and effort.

[josayeee]

A half decent CPA could get this assessment reversed provided you are willing to pay for the advice.

CRA needs the extra tax dollars to make up for the deficit that Trudeau said was going to be balanced before the next election. This of course won’t happen.

[quasi]

I hope you win but I don't think you will. CRA's entire purpose is to squeeze as much money out of every working citizen as they can. If they can find any reason to fuck you they will.

[68style]

Originally Posted by josayeee

A half decent CPA could get this assessment reversed provided you are willing to pay for the advice.

CRA needs the extra tax dollars to make up for the deficit that Trudeau said was going to be balanced before the next election. This of course won’t happen.

What politician hasn't said they would balance the budget and then not done it? Do you even read the actual financial statistics or just say whatever you "feel" you see? Did Harper balance the budget? Or did he run even bigger deficits than this government has? Maybe you should go back and check.

What a stupid post. CRA's mandate isn't to help the PM balance his budget.

That said, they do have a nasty habit of punishing all the little people and letting wealthy tax cheats off the hook... which if their goal was to help out the PM they wouldn't do. It's just easier to put the screws to common people and the common person doesn't fight back or doesn't have a fancy accountant to hide all their stuff off-shore.

[Gh0st]

I appreciate everyone's comments!

CRA dude called me and said they are still reviewing and will have a verdict on Tuesday for me. At least he had the decency to call me and provide a status update.

Going to spend this weekend lubing my asshole in preparation of Tuesday's buttfucking from CRA.

[josayeee]

Originally Posted by 68style

What politician hasn't said they would balance the budget and then not done it? Do you even read the actual financial statistics or just say whatever you "feel" you see? Did Harper balance the budget? Or did he run even bigger deficits than this government has? Maybe you should go back and check.

What a stupid post. CRA's mandate isn't to help the PM balance his budget.

That said, they do have a nasty habit of punishing all the little people and letting wealthy tax cheats off the hook... which if their goal was to help out the PM they wouldn't do. It's just easier to put the screws to common people and the common person doesn't fight back or doesn't have a fancy accountant to hide all their stuff off-shore.

You need to take it easy. I’m trying to say that I’ve seen a huge shift in how CRA has been managed ever since the Liberals came in. CRA’s clamped down much harder these last few years even if it’s at the expense of common people.

[BIC_BAWS]

Originally Posted by josayeee

You need to take it easy. I’m trying to say that I’ve seen a huge shift in how CRA has been managed ever since the Liberals came in. CRA’s clamped down much harder these last few years even if it’s at the expense of common people.

This. GST refund claim over $500? Audit. Do one thing wrong, accidental or not, penalties, interest, and audit. It's been really really really bad recently. What people have said about CRA trying to make up deficit isn't entirely wrong. They really have been trying to collect as much tax as possible. Way more than previous years.

[adrnlnrush00]

OP, I'm sorry to hear about your situation. As a CPA running my own practice, I deal with the CRA on a daily basis. The experiences I am having concur with comments already made by other members here in that the CRA are more aggressive in going after the low-lying fruit - this happens to be the average Joe; whereas, folks with the financial means will hire professional help to object, appeal, and do whatever to fight the audit.

Not that it's too late, but my general advice to anyone receiving a letter from the CRA is to not take on the audit without professional help. It's not that you can't do it... it's just that anything that you say, or write, can, and will, be used against you so an experienced CPA will know how to protect you against yourself.

Honestly, most first-level auditors barely know the legislation that they're auditing so you really need to get down to the basics which is to start your response by looking at the legislation.

(1) Look at each criteria for the GST rebate.
(2) Apply your case facts and circumstances to the criteria. Take nothing for granted so every little detail matters and connect the dots for the auditor. You don't want to assume that the auditor will apply your case facts for you and will conclude the same way that you would.
(3) Present your supporting documents so that you have some proof to your story.
(4) Conclude your argument based on your analysis.

I'm simplifying the process a bit here but that's really what any audit boils down to.

Last, it's not too late to hire professional help. CRA auditors often become more "reasonable" when they know you have professional help.

Good luck.

[fsy82]

Originally Posted by adrnlnrush00

OP, I'm sorry to hear about your situation. As a CPA running my own practice, I deal with the CRA on a daily basis. The experiences I am having concur with comments already made by other members here in that the CRA are more aggressive in going after the low-lying fruit - this happens to be the average Joe; whereas, folks with the financial means will hire professional help to object, appeal, and do whatever to fight the audit.

Not that it's too late, but my general advice to anyone receiving a letter from the CRA is to not take on the audit without professional help. It's not that you can't do it... it's just that anything that you say, or write, can, and will, be used against you so an experienced CPA will know how to protect you against yourself.

Honestly, most first-level auditors barely know the legislation that they're auditing so you really need to get down to the basics which is to start your response by looking at the legislation.

(1) Look at each criteria for the GST rebate.
(2) Apply your case facts and circumstances to the criteria. Take nothing for granted so every little detail matters and connect the dots for the auditor. You don't want to assume that the auditor will apply your case facts for you and will conclude the same way that you would.
(3) Present your supporting documents so that you have some proof to your story.
(4) Conclude your argument based on your analysis.

I'm simplifying the process a bit here but that's really what any audit boils down to.

Last, it's not too late to hire professional help. CRA auditors often become more "reasonable" when they know you have professional help.

Good luck.

I concur with everything you said. Its funny because we just had a CRA auditor at our firm last week and she didnt not know a lot about the tax laws. Honestly its getting a lot worse. Most auditors do not know what they are doing honestly.

[Traum]

Originally Posted by josayeee

You need to take it easy. I’m trying to say that I’ve seen a huge shift in how CRA has been managed ever since the Liberals came in. CRA’s clamped down much harder these last few years even if it’s at the expense of common people.

One change I remember from a few years ago (2017) is that diabetics used to be eligible for long-standing disability tax credit to help them manage a disease. Prior to the policy change, an overwhelming majority of applicants would qualify for it. But after the policy was changed, CRA stopped approving the disability tax credit for a lot of diabetic people who had previously claimed it. It created an uproar among diabetics, and even Diabetes Canada stepped in to publically denounce the Liberals for the policy change. The CRA / Liberals eventually caved in, and restored the previous practice of approving for the tax credit. But it was bad and generated a lot of bad press on both the CRA as well as the Liberals.

So I would totally agree that the CRA has been whipped into doing the Liberals dirty biddings since they came onboard.

(And hey what do you know -- our lovely Drama Boy has yet again went out to pledge $150M of our money to help Brazil fight their Amazon fires. He's got to get some of the money back somehow, right?)

[tiger_handheld]

Originally Posted by adrnlnrush00

Last, it's not too late to hire professional help. CRA auditors often become more "reasonable" when they know you have professional help.

Good luck.

Anytime you deal with complex issues involving CRA - above is true.

Just google pana papers KPMG CRA Ottawa - you'll see the bat phone rang at the CRA office from a KPMG partner and rest is history.

[Gh0st]

Originally Posted by adrnlnrush00

OP, I'm sorry to hear about your situation. As a CPA running my own practice, I deal with the CRA on a daily basis. The experiences I am having concur with comments already made by other members here in that the CRA are more aggressive in going after the low-lying fruit - this happens to be the average Joe; whereas, folks with the financial means will hire professional help to object, appeal, and do whatever to fight the audit.

Not that it's too late, but my general advice to anyone receiving a letter from the CRA is to not take on the audit without professional help. It's not that you can't do it... it's just that anything that you say, or write, can, and will, be used against you so an experienced CPA will know how to protect you against yourself.

Honestly, most first-level auditors barely know the legislation that they're auditing so you really need to get down to the basics which is to start your response by looking at the legislation.

(1) Look at each criteria for the GST rebate.
(2) Apply your case facts and circumstances to the criteria. Take nothing for granted so every little detail matters and connect the dots for the auditor. You don't want to assume that the auditor will apply your case facts for you and will conclude the same way that you would.
(3) Present your supporting documents so that you have some proof to your story.
(4) Conclude your argument based on your analysis.

I'm simplifying the process a bit here but that's really what any audit boils down to.

Last, it's not too late to hire professional help. CRA auditors often become more "reasonable" when they know you have professional help.

Good luck.

just a quick update here to end off the week --

received a call from CRA today and everything got approved. will be receiving my confirmation letter and the cheque in about 1 week as it's coming from PEI.

Just wanted to say thanks to adrnlnrush00 for vetting my documents prior to sending them out. His guidance was valuable and put me at ease. Thank you again everyone for the advice on RS. Cheers!

[adrnlnrush00]

Originally Posted by Gh0st

just a quick update here to end off the week --

received a call from CRA today and everything got approved. will be receiving my confirmation letter and the cheque in about 1 week as it's coming from PEI.

Just wanted to say thanks to adrnlnrush00 for vetting my documents prior to sending them out. His guidance was valuable and put me at ease. Thank you again everyone for the advice on RS. Cheers!

Oh this is such an awesome start to the weekend! Thanks Ghost for updating the thread and I'm so happy that everything worked out for you.

It was a win on two fronts too because your written response was a good one so you really didn't need to engage me to write the response for you and that saved you some professional fees too.

All around this was a great result and the best outcome we could have expected. Congrats!

[quasi]

Originally Posted by Gh0st

just a quick update here to end off the week --

received a call from CRA today and everything got approved. will be receiving my confirmation letter and the cheque in about 1 week as it's coming from PEI.

Just wanted to say thanks to adrnlnrush00 for vetting my documents prior to sending them out. His guidance was valuable and put me at ease. Thank you again everyone for the advice on RS. Cheers!

I was skeptical, glad it worked out for you.

[Mr.HappySilp]

Is all hit and miss. A friend of mine lived in her newly purchase apartment for 6 months then got marry and move in with her husband and rented out the place. She already got her GST rebate and is fully prepare to pay it back. But they never audit her.

Another friend purchase same an apartment in the building I used to live it and got audit. Building was completed in July 2017 and that's when she move in. Now they want to audit her asking her for all the bills and prof. But her cable and internet bill starts on Sept and she is worry CRA will deny it.

Kinda of stupid to get deny since the bill is only off by a few months.

Luckily I never got audited and actually waited over a year before I sold my place and got a 2 bedroom apartment.

[BIC_BAWS]

Originally Posted by Mr.HappySilp

Is all hit and miss. A friend of mine lived in her newly purchase apartment for 6 months then got marry and move in with her husband and rented out the place. She already got her GST rebate and is fully prepare to pay it back. But they never audit her.

Another friend purchase same an apartment in the building I used to live it and got audit. Building was completed in July 2017 and that's when she move in. Now they want to audit her asking her for all the bills and prof. But her cable and internet bill starts on Sept and she is worry CRA will deny it.

Kinda of stupid to get deny since the bill is only off by a few months.

Luckily I never got audited and actually waited over a year before I sold my place and got a 2 bedroom apartment.

Like everyone said in this thread, if you deal with CRA on a daily basis, you'll know that everything from CRA is a hit or miss. The best practice is to do everything you can to make sure that you're covered, so even if you get audited, you have all the documents prepared to prove your case.

[donk.]

I heard revscene members are professional CRA workers