Self-Contained Domestic Establishment

Bowman C.J. accepted the position of the taxpayers that the only portion of a (4,448 square foot), two-storey building, that had been constructed for use in a bed and breakfast operation and which had separate entrances from outside for each of the five private guest rooms which was a self-contained domestic establishment was a 504 square foot private area which the taxpayers used for sleeping and other private use and which was not available to the guests. The fact that friends and family occasionally stayed in the guest rooms and the fact that the taxpayers used the kitchen and laundry (situate outside the private area) for both business and personal use did not turn the entire house into a self-contained domestic establishment.

The taxpayer and his spouse operated a tourist guest home and used 15% of the area of the home as a private living area ("consisting of a bedroom, living area, bathroom and two bedrooms in an attic for their daughters"). In finding that this private living area was itself a self-contained domestic establishment, rather than the whole of the home constituting such an establishment, Bowman A.C.J. found (p. 2524) that the living quarters were essentially a separate apartment within the inn, and that finding was "more consonant with what subsection 18(12) is seeking to achieve".