CRA indicates that use of vacant land as a golf range in the somewhat distant past was not exclusive and direct use to meet the objectives of a golf club for s. 149(5)(e)(ii) purposes

A golf club relying on the s. 149(1)(l) exemption sold a severed parcel of land in 2024 that had been owned for 35 years (1990 to 2024) and used as a golf range for 5 of those years (1998-2002) and otherwise was vacant. In finding that the gain was not exempted pursuant to the exemption in s. 149(5)(e)(ii) for “property used exclusively for and directly in the course of providing the dining, recreational or sporting facilities provided” by the golf club for its members, CRA stated that s. 149(5)(e)(ii) “is intended to only exclude taxable capital gains from property that is required and used exclusively to meet the objectives of the tax-exempt NPO” and that the limited historical use in this case was “insufficient to meet the threshold of being property used exclusively for and directly in the course of providing facilities to members.”

Neal Armstrong. Summary of 6 May 2025 External T.I. 2024-1031071E5 under s. 149(5)(e)(ii).