CRA rules that finishing a building interior qualifies as “erecting” the building for Reg. 1102(5)(a) purposes.

Reg. 1102(5)(a) deems a building leasehold interest that was acquired "by reason of…the taxpayer erect[ing] a building" to be a Class 1 rather than Class 13 property.

The shell of a large apartment, which had already been erected by a development partnership, was leased by it to a sister partnership, which under the lease was required to finish the work at its expense. CRA ruled that Reg. 1102(5)(a) applied to the cost of this finishing work. This is an expansive interpretation of "erect."

Neal Armstrong. Summary of 2015 Ruling 2014-0552291R3 under Reg. 1102(5).