Canada Tax Court Issues Decision Clarifying GST Treatment of Mixed-Use Property Purchase

The Canadian Tax Court March 24 issued Decision No. 2026 TCC 59, clarifying the GST treatment of a mixed-use property purchase. The taxpayer, an individual, purchased a building comprised of a residential apartment and a vacant former restaurant. While the residential portion was treated as being GST-exempt, the taxpayer didn’t remit GST on the commercial portion, arguing that it was exempt because he intended to convert it to residential use. The tax authorities assessed GST and penalties, and Revenu Quebec retroactively cancelled the taxpayer’s GST registration. On appeal, the Tax Court found that: 1) the commercial unit was taxable at ...