CRA rules that an assignment of a condo purchase agreement did not occur as part of an adventure in the nature of trade

A couple entered into an agreement with the builder to purchase a new condo and then, before the condo project had been constructed and closed, assigned their purchase contract to an assignee at a gain. Whether their assignment of their purchase contract was exempt from GST/HST turned (under (f) of the definition of “builder”) on whether they had acquired their equitable interest in the new condo as part of an adventure in the nature of trade or in the course of a business.

CRA accepted the representations of the couple that their decision to sell out was the result of an unexpectedly successful fertility treatment, producing multiple children (who would not all fit into the condo), stating that the “CRA views the birth of the Assignors’ […][multiple children] as an unforeseen event, given the highly unlikelihood of it occurring given their ages, past fertility treatment results as well as the fertility doctor’s views” – their sale of their contract was exempt.

CRA on the GST side is bolder – their income tax siblings likely would not give a ruling like this.

Neal Armstrong. Summary of 3 December 2021 GST/HST Ruling 193347r under ETA s. 123(1) – builder – para. (f).