Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 150927
June 20, 2013
Dear [Client]:
Subject: GST/HST RULING
Application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to trailer park site rental fees
Thank you for your letter of February 2, 2013, concerning the application of the GST/HST to the rental of a site at [...] (the Resort) located [in] [...].
The HST applies in the participating provinces at the following rates: 13% in Ontario, New Brunswick and Newfoundland and Labrador, 14% in Prince Edward Island (effective April 1, 2013) and 15% in Nova Scotia. The GST applies in the rest of Canada at the rate of 5%.
Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
Based on your letter and supporting documentation, as well as our phone conversation of March 6, 2013 with [...], we understand the following:
1. You first began leasing [...] (the Site) at the Resort in [mm/yyyy]. You have been leasing the Site on a one-year term, renewable annually. The Resort is a seasonal waterfront resort which is generally open from the beginning of May to the Thanksgiving weekend. You have occupied the Site from [...][May] until October (Thanksgiving) each year since [mm/yyyy].
2. You have installed a [...] unit, manufactured by [...], on the Site. The unit measures [...]' by [...]'. The unit is not a camping trailer. It cannot be towed by a car. The unit has remained on the Site year-round since the time of purchase in [yyyy].
3. The unit is fully skirted and includes an attached deck and sunroom measuring [...]. The Site is fully landscaped including landscaping around the perimeter of the unit. You have provided photos of your unit.
4. The hauling tongue has been removed from the unit. The unit is tied down and permanently installed on a concrete block foundation in a manner that is conducive to long-term residential use.
5. The unit is designed for year-round habitation and has permanent sewer, electrical, water and satellite systems. Central air conditioning, as well as four-season central heating, is also included.
6. You have indicated that you do not have phone service or mail delivery at the Site. You have maintained the address of your residence in [...][City 1] as your mailing address.
7. You indicate that you reside in your unit at the Resort from [May] to the Thanksgiving weekend every year. During this period you return to your primary place of residence in [City 1] from time to time only to attend doctor appointments and pick up any mail.
8. During the winter, the Site is not easily accessible as the roads are not cleared in the park.
9. You have provided a copy of [...] (the Agreement) for the Site. You have also provided copies of the invoices for the [yyyy] and [yyyy] rental of the Site. The Agreement indicates that the use of the Site shall be for recreational and/or vacation purposes only. In addition, the occupant of the Site must maintain liability insurance in an amount not less than $[...] as well as "all perils" insurance coverage.
10. You indicate that your case is similar to [...], who are also residents of the Resort, and that they have received a rebate of the HST charged on the rental of their site.
Ruling Requested
You would like to know whether the rental in respect of the Site is subject to GST/HST.
Ruling Given
Based on the facts set out above, we rule that the amount charged for the rental of the Site is consideration for a supply of land that is exempt of the GST/HST under subparagraph 7(a)(i) of Part I of Schedule V to the ETA.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
Explanation
Subparagraph 7(a)(i) of Part I of Schedule V to the ETA provides that a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement that provides for continuous possession or use of the land for at least one month is exempt if the supply is made to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals.
Subsection 123(1) defines the term "residential unit" to include a house, semi-detached house, mobile home or "any other similar premises". Whether a particular unit has the same permanent residential characteristics as a house such that it is considered to be a "residential unit", is affixed to the land, and is used as a place of residence for individuals is determined on a case-by-case basis taking into consideration the facts and circumstances of the particular case.
Based on the facts referred to above, the unit is considered to be a residential unit. It has the necessary residential characteristics, including permanency, as a house. It is installed in a permanent manner that is conducive to long-term residential use and is connected in a permanent way to sewer, electrical and water facilities. As such, the unit is considered to be a residential unit that is affixed to the land.
Whether a particular unit is used as a place of residence is a question of fact. That determination is made on a case-by-case basis. A residential unit that is affixed to the land may be considered to be a place of residence based on the purpose for which it was affixed to the land, as well as the length of time and the frequency throughout the year that the individual occupying the unit is physically present and using the unit as a place of residence.
The meaning attributed to a "place of residence", as opposed to "lodging", is based on a determination of the purpose of the stay, the amount of time of the stay, and the physical presence of the individual(s) occupying the unit. If a unit is the individual's primary place of residence, it will be considered to be for use and enjoyment of the individual as a place of residence. While an individual has only one primary place of residence, it is possible for an individual to have more than one place of residence. To be considered an individual's place of residence, the unit should be used for purposes of habitation or dwelling, but would not normally include an abode of a transient nature.
In this case, the facts indicate that you have been using the unit as your place of residence throughout the period the Resort is in operation, annually, from May to the Thanksgiving weekend. As such, all of the requirements of subparagraph 7(a)(i) of Part I of Schedule V to the ETA are met.
ADDITIONAL INFORMATION
Tax paid in error
Under the ETA, where a person has paid an amount as or on account of tax that was not payable, the person may request a refund or credit of the amount from the supplier. A supplier may refund or credit the tax within two years after the day the amount was charged or collected. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act, available on the CRA Web site.
Where a refund or credit is not issued by the supplier, the person may make an application under subsection 261(1) for a rebate of the tax paid in error by completing and submitting application form GST 189, General Application for Rebate of Goods and Services Tax (GST)/Harmonized Sales Tax (HST), a copy of which is enclosed. It should be noted that a rebate application made under section 261 cannot include amounts that were paid in error more than two years before the application is filed.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9212. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Melissa Mercer
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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