March 2020 Newsletter

Lawn and garden care allowed as home office deduction

In the recent case of Hébert v. The Queen, 2019 TCC 266, Mr. Hébert was a civil engineer who had sold his business and provided consulting services from his home. He used the basement of his home as his office (with a separate entrance), and he had clients in the office. He also conducted arbitration session at his home.

As part of his deductible “home office” expenses, Mr. Hébert claimed 35% of the expenses that he paid to have the lawn mowed and annual flowers planted. This fraction was the same 35% as for his other home office expenses, based on the proportion of the home that he used for his business.

The CRA reassessed him to deny various expense claims including the lawn and garden care, and Mr. Hébert appealed to the Tax Court of Canada.

The Tax Court judge allowed the lawn and garden care expenses. She concluded that these expenses were intended to insure that the home was in perfect condition to receive clients. (For certain other expenses, the Tax Court upheld the CRA’s position.)

This decision is significant because CRA auditors often deny these expenses, although nothing in the CRA’s publications specifically addresses this issue. The Hébert case can be cited in support of such claims. However, as an “Informal Procedure” decision of the Tax Court, it is not binding on the CRA.

Last modified on March 13, 2020 12:00 am
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