CRA has a new memorandum on the situs of services supplied in relation to real property or TPP

CRA has published a new GST/HST memorandum on the place of supply rules for services that are in respect of real property or tangible personal property (TPP), or that are telecommunications services.

Examples include that of a B.C. law firm hired by a Newfoundland company to draft a sale agreement for TPP situated in B.C. and real property situated in Newfoundland. CRA indicates that as the law firm is making a single supply of a general service, integral elements of which are services relating to both TPP and real property, the place of supply of the service is not determined by the specific place of supply rules for services in relation to TPP or real property, and is instead determined by the Newfoundland address obtained from the company.

CRA states, presumably based on Club Intrawest, that where a supply of a service relates to real property that is situated both in Canada and outside Canada, the portion of the service relating to the real estate situated outside Canada will not be subject to GST/HST.

It provides the example of a New Brunswick company hired by another New Brunswick company to conduct a geological survey on a cross-border tract of land that is 20% in New Brunswick and 80% in the United States. CRA indicates that only 20% of the service is subject to HST at the New Brunswick rate of 15%, while the balance is not subject to GST/HST.

CRA provides various examples that make it clear that it regards a service provided in relation to an aggregation of properties as effectively being rendered in relation to a single property, so that it is necessary to prorate the real estate between the different provinces. For example, a Newfoundland company hires a New Brunswick company to inspect real property, which is situated as to one-third in each of New Brunswick, Newfoundland, and Ontario. Given that the supply is deemed to occur in the province with the highest rate, and there are two such provinces, the supply is deemed under s. 18 to be made where the business address of the supplier that is most closely connected with the supply is located, i.e., New Brunswick.

However, the Memorandum also states that where it is not possible for a supplier to determine the relevant proportion of the real property, the general place of supply rules for services (i.e., generally based on the address of the recipient) are applied.

Neal Armstrong. Summaries of GST/HST Memorandum 3-3-6-1, Place of Supply in a Province – Personal Services, Services in Relation to Property and Telecommunication Services, April 2026 under New Harmonized Value-added Tax System Regulations, s. 14, s. 15 and s. 18.