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.
[Addressee]
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 37706-r
May 17, 2011
Dear [Client]:
Subject:
GST/HST RULING
[...] [GST/HST treatment of site leases]
We refer to our letter of July 15, 2003, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to leases of sites in [...] (the Park).
This is to notify you that the GST/HST Ruling of July 15, 2003, case number 37706, (the Ruling), is revoked on the basis that the statements provided did not fully and accurately describe all the necessary facts and transactions for which you requested a ruling.
We would also take this opportunity to provide you with the Canada Revenue Agency's interpretative position with respect to the definition of "residential trailer park", as that term is defined in subsection 123(1) of the Excise Tax Act (ETA), and certain exemptions in section 7 of Part I of Schedule V to the ETA.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the ETA unless otherwise specified.
Interpretation Given
The phrase "residential trailer park" is defined as:
"the land that is included in a trailer park of the person or, where the person has two or more trailer parks that are immediately contiguous to each other, the land that is included in those contiguous trailer parks, and any buildings, fixtures and other appurtenances to the land that are reasonably necessary for
(a) the use and enjoyment of sites in the trailer parks by individuals residing in or occupying mobile homes, or travel trailers, motor homes or similar vehicles or trailers, situated or to be situated on those sites, or
(b) the purpose of engaging in the business of supplying those sites by way of lease, licence or similar arrangement,
but does not include such land and appurtenances or any part of them unless the land encompasses at least two sites and all or substantially all of the sites in the trailer parks
(c) are supplied, or are intended to be supplied, under a lease, licence or similar arrangement under which continuous possession or use of a site is provided for a period of at least
(i) one month, in the case of a mobile home or other residential unit, and
(ii) twelve months, in the case of a travel trailer, motor home or similar vehicle or trailer that is not a residential unit, and
(d) if the sites were occupied by mobile homes, would be suitable for use by individuals as places of residence throughout the year".
Whether sites are suitable for use by individuals as a place of residence throughout the year is a question of fact. However, in order for sites to meet that criterion, the sites would generally have to be accessible and serviced throughout the year. Sites may generally be considered accessible if they can be normally accessed by vehicle throughout the year. Sites may generally be considered to be serviced if they provide power, heat, and water and sewer services throughout the year.
With respect to the Park's [...] sites described in the Ruling, our understanding is as follows:
• The roads within the Park are not ploughed during the winter. If an individual wants to access their site during the winter, they can only do so on foot as vehicle access is not possible. Individuals wanting to access their site must leave their vehicle at the entrance to the Park and walk to their site.
• Water to the sites is shut off before winter freeze up.
• There is no sewage infrastructure in the Park. Each recreational vehicle has a septic tank that holds sewage and waste water that must be emptied periodically. While you offer the service of emptying septic tanks in recreational vehicles in the Park, the service is not available in the winter months. Further, as access to sites is restricted in the winter months, an individual cannot remove a recreational vehicle from a site during that time to empty the tank.
• Heat is available in the recreational vehicles as they come equipped with their own propane tanks. However, as access to the Park is not available in the winter months (other than by foot and then often at some distance from the Park entrance), refilling the tanks is not practical in the winter months.
• Recreational vehicles that are parked on a site in the Park are not permanently affixed to the site.We further understand that [...] [the Company] is not a "public service body" as that term is defined in subsection 123(1). (iFootnote 1)
If our above understanding is correct, the sites in the park cannot be considered to be accessible and serviced throughout the year. If that is the case, the Park would not meet the definition of a residential trailer park.
Paragraph 7(b) of Part I of Schedule V to the ETA exempts the supply of certain sites in a residential trailer park. However, if the Park is not a residential trailer park, the exemption in paragraph 7(b) cannot apply.
Subparagraph 7(a)(i) of Part I of Schedule V to the ETA exempts the supply of a site where the sites are not situated in a residential trailer park and the supply is made under a lease, licence or similar arrangement for a period of continuous possession or use of at least one month to the owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals. This exemption could apply, for example, to the supply of a site on which a mobile home is affixed provided the occupant uses the mobile home as a place of residence. However, this exemption in subparagraph 7(a)(i) of Part I of Schedule V to the ETA does not apply if the recreational vehicles in the Park are not affixed to the site. For a discussion on whether a recreational unit is a residential unit that is affixed to a site for the purpose of its use and enjoyment as a place of residence, see policy statement P-104, Supply of Land for Recreational Units such as Mini-homes, Park Model Trailers, and Travel Trailers.
If our above understanding is correct and the supply of a site in the Park is not exempt under either of the foregoing provisions, the supply will be subject to the GST/HST.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-954-8852. 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,
Hugh Dorward
A/Manager
Real Property Unit
Financial institutions and Real Property Division
Excise and GST/HST Rulings Directorate
i 1 A public service body is defined in that subsection as a non-profit organization, a charity, a municipality, a school authority, a hospital authority, a public college or a university;
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UNCLASSIFIED
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