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.
DATE :
September 18, 2012
TO :
[Addressee]
FROM :
Lynn Birnie
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
FILE:
143223
SUBJECT : GST/HST INTERPRETATION
Option to claim a provincial public service bodies’ rebate or a provincial new residential rental property rebate for new housing
We are writing in response to your [mm/dd/yyyy] [correspondence] regarding the application of subsection 256.2(9) of the Excise Tax Act (ETA) to claims by a public service body for a provincial new residential rental property rebate. In particular, you have asked us to review the position taken by the Compliance Programs Branch in denying a claim by […] ([…][the Organization]) for a provincial new residential rental property rebate in respect of the provincial portion of the HST paid by [the Organization] on the purchase of new residential units in British Columbia that it acquired for purposes of providing long-term accommodation.
All legislative references are to the ETA and the regulations thereunder unless otherwise specified.
[The Organization] is a charity that is not a GST/HST registrant, nor has [the Organization] been determined or designated to be a municipality for GST/HST purposes. As such, and prior to filing the claim at issue, [the Organization] had recovered a portion of the GST/HST paid or payable on its expenses by means of public service bodies’ rebates calculated at the charity rate and filed under GST/HST filing number […].
In [mm/yyyy], [the Organization] purchased [#] residential condominium units (collectively referred to hereafter as “the Units”) for $[…] plus $[…] HST from […] (“the Developer”), the registered owner of the newly constructed condominium complex in which the Units are situated. According to the Buyer Statement of Adjustments provided for our review, the Units are legally described as Strata Lots […].
[…]
[…][A question is] whether [the Organization] was similarly precluded from claiming the British Columbia new residential rental property rebate in respect of the provincial portion of the HST payable in light of its eligibility for a British Columbia public service bodies’ rebate (albeit for a lesser amount) in respect of that tax. […].
You concluded that [the Organization] was ineligible to claim the British Columbia new residential rental property rebate. In reaching this conclusion, you considered section 256.21, which provides for housing rebates in respect of the provincial component of the HST paid on qualifying residential property in accordance with the terms and conditions set out in the New Harmonized Value-Added System Regulations No. 2 (“the Regulations”). You also considered subsection 47(4) of the Regulations, in light of which, a person would only appear eligible to claim a British Columbia new residential rental property rebate for the provincial component of the HST paid on the acquisition, or deemed acquisition, of a new residential complex if the person qualifies for a GST/HST new residential rental property rebate under section 256.2 [in this case, under subsection 256.2(3)] on the federal component of the HST paid on that acquisition. However, as previously established, [the Organization] is ineligible to claim a rebate under 256.2(3) by virtue of the operation of subsection 256.2(9).
[…]
[The Organization] […][cited] the wording found in the Ministry of Finance Tax Information Notice, HST Notice #3 Residential Housing – New Housing Rebates and Transitional Rules for British Columbia HST, released by the Government of British Columbia on November 19, 2009, and in GST/HST Info Sheet GI-094, Harmonized Sales Tax: British Columbia New Residential Rental Property Rebate. These publications indicate that where a public service body is a landlord and is entitled to claim the British Columbia public service bodies’ rebate in respect of the provincial component of the HST paid or payable on the purchase or self-supply of its residential rental property, the body would be entitled to claim either the British Columbia public service bodies’ rebate or the British Columbia new residential rental property rebate.
You have asked us to confirm the CRA’s position on this issue.
We confirm that the aforementioned publications reflect the CRA’s administrative position on this issue. In addition, please note that this position extends to the recovery of the provincial component of the HST payable by public service bodies on new residential rental property in Ontario, as reflected in the Ministry of Finance Information Notice No. 4, Additional Information for Homebuyers and the Housing Industry under Ontario HST, released by the Government of Ontario on November 18, 2009, GST/HST Info Sheet GI-093, Harmonized Sales Tax: Ontario New Residential Rental Property Rebate, and Guide RC4231, GST/HST New Residential Rental Property Rebate. That said, a public service body cannot claim both a British Columbia (or Ontario) public service bodies’ rebate and a British Columbia (or Ontario) new residential rental property rebate in respect of the provincial component of the HST payable on the acquisition, or deemed acquisition of a residential complex.
Accordingly, as [the Organization] is a person that is entitled to claim the British Columbia public service bodies’ rebate in respect of the provincial component of the HST paid on its purchase of the Units, [the Organization] would be entitled, at its discretion, to claim either the British Columbia public service bodies’ rebate or the British Columbia new residential rental property rebate in respect of that provincial component.
If you require clarification with respect to any of the issues discussed in this memo, please call me at (604) 658-8548.
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