Carlile v. Canada
A-486-93
Desjardins, McDonald JJ.A.
11/7/95
20 pp.
Principal residence-Appeal from Trial Division decision dismissing taxpayer's allegation parcel of land of 32.755 acres, sold in 1987, falling within definition of "principal residence" under Income Tax Act, s. 54(g), making proceeds of disposition free from tax on capital gains pursuant to Act, s. 40(2)(b)-In alternative, whether Trial Judge erred in determination of property value as of Dec. 31, 1971 (V-Day)-Appeal allowed, McDonald J.A. dissenting-Per Desjardins J.A.: Taxpayer third-generation owner of 32.755-acre property in Ancaster, Ontario-3 acres around house for personal use, 25 acres of remaining acreage rented to farmer-Act basically defining "principal residence" as housing unit and one acre and, if taxpayer can meet "formidable" burden, land in excess of one acre necessary to use and enjoyment of housing unit as residence-The Queen v. Yates (1986), 86 DTC 6296 (F.C.A.); Augart v. The Queen (1993), 93 DTC 5205 (F.C.A.), defining objective and subjective tests to establish excess land necessary to use and enjoyment, applied-According to applicable by-law, subject lot located in "Agricultural Zone" where minimum lot area fixed at 25 acres-Legal regime, both on V-Day and in 1987, making it uncertain appellant could have obtained consent from local authority for subdivision of lot-"Objective" test met-Per McDonald J.A. (dissenting): appeal should be dismissed-As expert planning witness of opinion, on balance of probabilities, appellant could have obtained Board's consent to divide property, appellant did not meet formidable onus of proving more than one acre needed for use and enjoyment of housing unit-Fact obtaining subdivision would have been "difficult" not sufficient to discharge onus-Income Tax Act, S.C. 1970-71-72, c. 63, ss. 40(2)(b)(as am. by S.C. 1977-78, c. 1, s. 17(1)), 54(g) (as am. by S.C. 1973-74, c. 14, s. 14(1); 1974-75-76, c. 26, s. 25(2); 1976-77, c. 4, s. 14(1); 1980-81-82-83, c. 140, s. 23(3),(4); 1985, c. 45, s. 23(1),(2); 1988, c. 55, s. 31(2)).