How a Condo Buyer Won His GST Appeal in Tax Court

By Amit Ummat | Ummat Tax Law PC

A Vancouver condo buyer paid $20,304.76 in GST on an assignment from a non-resident. The CRA later reduced the amount to $8,244.76. The buyer represented himself in the Tax Court of Canada and won. The case turned on what the assignor had actually transferred and whether the Crown had given the buyer fair notice of its alternative grounds for keeping the tax.

In Jiang v. The King, 2026 TCC 188, Justice Sylvain Ouimet allowed the appeal without costs. The assignment took place in 2019, before Parliament changed the GST/HST treatment of qualifying new-home assignments. The decision’s broader value lies in what it says about defending a reassessment when the Crown changes its theory at trial.

What did the buyer actually acquire?

In 2015, Gang Li, a non-resident of Canada, agreed to buy a proposed Vancouver strata lot from a developer. In February 2019, he assigned his rights and obligations under that agreement to Ling Jiang. The price included a $241,200 deposit reimbursement and a $164,895.24 assignment fee, plus the amount identified as GST. After Jiang sought a refund, the CRA reduced the tax to 5% of the assignment fee. (Jiang, paras. 1–7.)

The CRA relied on provisions that require a purchaser to account directly for GST in certain sales of real property, including where the supplier is a non-resident. Those provisions depended on Li having sold real property to Jiang.

The Court looked to British Columbia property law. The proposed strata lot had yet to come into legal existence when the assignment was signed, so Li held no legal interest in it. The Court also found that Li held no equitable interest. On these facts, specific performance would have required the developer to complete substantial construction, and the remedy was unavailable at the time of assignment. What Li could transfer was his contractual right to acquire the future unit from the developer. That right was intangible personal property under the Excise Tax Act. The real-property self-assessment provisions therefore did not apply. (Jiang, paras. 100–112, 117–124.)

Why the Crown’s alternative failed

The Crown argued that GST could still be payable under subsection 165(1) even if Li had supplied contractual rights. That argument raised a different question. Under the general place-of-supply rule, rights exercisable in Canada or relating to Canadian real property can be treated as supplied in Canada. But subsection 143(1) generally deems a non-resident’s supply of personal property to be made outside Canada unless an exception applies. The relevant question here was whether Li made the supply in the course of a business carried on in Canada.

The Crown had cited subsection 165(1) in its Reply. Its factual assumptions addressed Li’s intention to sell in the course of a business or as an adventure in the nature of trade. The Reply omitted the allegation that Li made the supply in the course of a business carried on in Canada. The record showed no other Canadian transaction, and the issue had not been canvassed at the hearing. The Court declined to make a finding on that point because Jiang had lacked a fair opportunity to address it. The Court likewise declined to uphold the reassessment under the unpleaded direct-assessment provision in paragraph 296(1)(b) or to consider the Crown’s late reliance on section 133. (Jiang, paras. 125–159.)

The difference between the two theories matters. A taxpayer preparing to prove what a contract conveyed would assemble the agreements and evidence about the state of the development. A taxpayer defending the Crown’s alternative would also need evidence about the assignor’s business activities and where they took place. A citation to the charging provision gave Jiang little reason to prepare that second case.

What changed for assignments made today?

For supplies made on or after May 7, 2022, section 192.1 of the Excise Tax Act deems a qualifying assignment of a new-home or condo purchase agreement to be a taxable sale of an interest in real property. Where the assignment agreement identifies in writing the portion solely attributable to reimbursing the original deposit, that amount is excluded from the consideration under the provision. Jiang’s 2019 assignment preceded that statutory rule. Excise Tax Act, s. 192.1 and Budget Implementation Act, 2022, No. 1, s. 52.

For anyone defending a GST/HST reassessment, the practical question is whether the Crown’s Reply identifies the facts and provisions needed to sustain each theory it intends to pursue. In Jiang, the alternative turned on whether the assignor carried on business in Canada. That fact had little significance under the Crown’s original theory and became essential under its alternative. By the time the alternative was spelled out, the hearing had already taken place.