Canada Tax Court Issues Decision Clarifying GST, Income Tax Treatment of Post-Construction Property Sales

The Canadian Tax Court May 19 issued Decision No. 2026 TCC 87, clarifying the GST and income tax treatment of post-construction property sales. The taxpayer, an individual, purchased a condominium in 2015 and sold it in 2018 after construction was completed. The taxpayer didn’t report the gain, assuming the property would qualify as her principal residence, though she never lived in it. The Minister of National Revenue taxed the gain under the Income Tax Act on the grounds the taxpayer engaged in speculation or trade, and determined she was a builder required to collect GST on the sale. On appeal, ...