Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 86356r
July 12, 2010
Dear XXXXX:
Subject:
GST/HST RULING - Request for reconsideration
New Residential Rental Property Rebate Eligibility
Thank you for your letter XXXXX in which you request a review of the ruling issued to you on February 23, 2010, in case #86356 with respect to your eligibility to receive a GST/HST new residential rental property (the "NRRP") rebate for the purchase of a newly constructed condominium unit situated at XXXXX.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
Statement of Facts
In addition to the facts set out in our ruling of February 23, 2010, you provide the following comments and clarifications:
1. The XXXXX bylaws that were adopted at the founding meeting made provision for rental of the unit given that the unit was purchased prior to the adoption of the bylaws.
2. A main factor in your sale of the unit was the fact that the other condominium owners did not wish to have any condominium rentals in the complex.
3. With respect to specific actions you took to rent the unit, you confirm the earlier statement provided, "it sat there and I used word of mouth". You explain that you were XXXXX. As such, you had little time to prepare the unit for rent. In addition, you were waiting for appliances and window coverings.
4. You have lived in the community for XXXXX years and did not need to pay a rental agency to promote the rental of the unit. You claim that with the large number of friends and acquaintances in the community, you would not have had a problem finding a renter. Furthermore, you stress that from XXXXX until XXXXX, there was no need to promote the rental of the unit since the unit had sustained extensive XXXXX damage and could not be rented until the repairs were completed.
Ruling Requested
In light of the additional comments and clarifications provided in your letter, you ask that we reconsider our ruling of February 23, 2010, in which we ruled that you have not met the eligibility requirements for the NRRP rebate as set out under subsection 256.2(3) in respect of the purchase of the residential condominium unit situated at XXXXX.
Ruling Given
Based on the statements and facts set out above and in our ruling of February 23, 2010, we confirm our ruling that you do not meet the eligibility requirements for the NRRP rebate as set out under subsection 256.2(3) in respect of the purchase of the residential condominium unit situated at XXXXX.
Under subsection 264(1), as the recipient of an overpayment of a rebate for which you are not eligible, you are required to repay the overpayment to the Receiver General, with interest, as of the day the amount was paid to you.
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.
Explanation
Having carefully considered the additional information and comments provided in your letter XXXXX, our position regarding your eligibility for the NRRP rebate remains as outlined in our ruling letter of February 23, 2010. In addition to the comments provided in the explanation of our previous ruling letter, we add the following.
When a rebate application is filed, subsection 297(1) requires the Minister to consider a person's application for a rebate with all due dispatch and assess the amount of the rebate payable to the person. Under subsection 297(2), the Minister may reassess or make an additional assessment of the amount of a rebate, notwithstanding any previous assessment of the amount of the rebate. In general, subject to certain exceptions, such reassessment is not normally made more than four years after the day on which the application for the rebate was filed.
In circumstances where it is subsequently determined that a person has been paid or credited an amount for a rebate to which the person is not entitled, or an overpayment of a rebate, section 264 requires that the recipient repay the amount to the Receiver General as of the date the amount was paid or credited to the person. Where an amount is payable by a person under section 264, subsection 297(2.1) provides that the Minister may assess, reassess or make an additional assessment of the amount notwithstanding any previous assessment.
Upon further review of this case, it was determined, as set out in the ruling dated February 23, 2010, that you were not eligible to receive the NRRP rebate since the unit in question was not a "qualifying residential unit" as defined under subsection 256.2(1) and explained in the ruling issued February 23, 2010. As such, the eligibility requirements under subsection 256.2(3) are not met.
The NRRP rebate application filed by you on XXXXX, identified the application as a "type 6", being a purchaser/landlord who is not the builder, who purchased a taxable residential complex, and who leased both the residential unit and the land part of the complex. However, you did not in fact ever lease the complex. In addition, the response provided to you XXXXX, clearly indicated that a ruling could not be issued without further review or audit to determine the particular facts, and that a general interpretation of the relevant ETA provisions was being provided.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at (613) 952-9248 or Marcel Boivin at (613) 954-3772.
Yours truly,
Ivan Bastasic
Director
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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