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: 152550
August 6, 2013
Dear [Client]:
Subject: GST/HST RULING
Sale of real property
Thank you for your letter of March 28, 2013, concerning the application of the Harmonized Sales Tax (HST) to the sale of your residence located at [...] (the Property).
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 Goods and Services Tax (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Effective April 1, 2013, the 12% HST in British Columbia has been replaced by the 5% GST and a provincial sales tax.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 our telephone conversations, we understand the facts to be as follows:
1. The Property is a [...]-acre parcel of land that contains a house of approximately [...] square feet.
2. You purchased the Property [...] years ago exempt of the GST/HST and have used it solely as your place of residence for the entire time you have owned it.
3. You have not made any subdivisions to the Property, have not severed the Property from another parcel of land, have not used the Property in any business, and have not derived any revenue from the Property.
4. Although you are not aware of restrictions that impose a minimum lot size, most of the residential parcels of land in the surrounding countryside where the Property is located are similar in size.
5. You have not made renovations to the house, have not claimed any input tax credits with respect to the Property, and are not registered for the GST/HST.
6. You are an employee and are not engaged in any business in respect of real property.
7. In the near future, you plan to sell the Property in its existing condition. Additionally, you may purchase an interest in another house that is currently owned by the person you intend to marry.
Ruling Requested
You would like to know whether the sale of the Property is subject to the HST. You would also like to know whether the sale of the Property is subject to the HST if you were to acquire an interest in the other house before you sell the Property.
Ruling Given
Based on the facts set out above, we rule that the sale of the Property is exempt of the HST. This is the case regardless of whether you acquire an interest in the other house before you sell the Property.
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.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 604-658-8544. 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,
Eric Paraskake
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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