CRA rules that a sale of a condo purchase contract was an adventure in the nature of trade in the absence of any compelling evidence to the contrary

A non-resident (the “Assignor”) entered into an agreement to acquire a new condo (the “Strata Lot”) with the stated intention of moving into it with her family but, while the condo was being constructed, also purchased a townhouse in the same province and lived there with her family. She then assigned the agreement to purchase the new condo at a gain before the purchase closed.

In contrast to the ruling referenced in the previous post, CRA ruled that the Assignor had not established that this transaction was not an adventure in the nature of trade, so that she was a builder for GST/HST purposes, and her sale of her purchase agreement was a taxable supply. CRA stated:

In the absence of any outward indicators to support your assertion …the CRA views the Assignor’s action of selling the interest in the Strata Lot as evidence that the Assignor acquired the interest in the Strata Lot for the primary purpose of selling the interest in the course of a business or an adventure or concern in the nature of trade.

Neal Armstrong. Summary of 10 January 2020 GST/HST Ruling 190414r under ETA s. 123(1) – builder – para. (f).