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
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 94993
Business Number: […]
November 29, 2012
Dear [Client]:
Subject: GST/HST RULING
Appraisals of damaged property and the GST/HST
Thank you for your letter of [mm/dd/yyyy], concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to real estate valuations by your company and our subsequent telephone conversation of [mm/dd/yyyy].
As we discussed, and further to our letter of [mm/dd/yyyy], one of the requirements for an appraisal of damaged property to be an exempt supply is for the person supplying the appraisal to inspect the property. However, there are also other conditions that apply. The requirements that would need to be satisfied to make a real estate valuation of a damaged or destroyed property an exempt supply are set out in paragraphs (j), (j.1) and (r) of the definition of financial service in subsection 123(1) of Part IX of the Excise Tax Act (the ETA). Of those requirements, the ones that would apply to your company’s real estate appraisals are:
* Your company must be supplying the appraisal service to an insurer or a provincially licensed insurance adjuster for the purpose of satisfying an insurance claim.
* Your appraisal must be of the damage caused to the property.
and
* Your company as the supplier of the appraisal must be the person to inspect the property.
Where your company is supplying a real estate appraisal in the case of a loss of property (e.g., where the property has been completely destroyed), the requirements are similar:
* Your company must be supplying the appraisal service to an insurer or a provincially licensed insurance adjuster for the purpose of satisfying an insurance claim.
* Your appraisal must be of the value of the property.
and
* Your company, as the supplier of the appraisal, must be the person to inspect the site where the property was located before its loss.
Note that the appraisal would not be exempt if it were supplied by an accountant, actuary, lawyer or notary in the course of a professional practice.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-4394. 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,
Doris McMullan
Insurance and ITC Allocations Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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