8 December 2005 GST/HST Ruling 50398 - Application of the GST/HST to the Provision of Property and Services to Individuals Living at a Long-term Residence for Seniors

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.

Dear XXXXX:

Thank you for your letter and attachments concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the provision of property and services to individuals living at the XXXXX. Your letter was forwarded to us by the XXXXX GST/HST Rulings Centre for our direct response to you. We apologize for the delay in providing you with our response.

All legislative references are to the Excise Tax Act unless otherwise noted.

Statement of Facts

Our understanding of the facts is as follows:

1. You own and operate a long-term residence for seniors, known as the XXXXX (the Facility). The Facility can accommodate up to XXXXX residents who each have a bedroom of their own. The bedrooms are generally supplied on a furnished basis, although you do permit residents to bring in their own furniture for their bedroom if they wish. There are also commode chairs, walkers and bathtub assistance devices available to those residents that need them.

2. Residents who choose to live at the Facility must be continent, able to walk on their own, and, for the most part, able to live independently, i.e., they do not require constant supervision and they can wash, feed and clothe themselves. If a resident becomes unable to get around the Facility on their own, or becomes incontinent or begins to require regular nursing or personal assistance while living at the Facility, the lease agreement is terminated and the resident moves into a facility that offers more care.

3. An individual who chooses to live in the Facility enters into a XXXXX (the Lease), a copy of which was included in your submission. The term of the Lease is one year and the resident agrees to pay a certain total amount, payable in equal monthly instalments on the first day of each calendar month ^[ix]footnote 1. Under the Lease, you agree to provide the following property and services:

(a) an assigned bedroom for the private use of the resident,

(b) use of the kitchen, common room and bathroom at the Facility,

(c) utilities that include water, heat, hydro, cable television, and use of a telephone,

(d) three meals and two snacks per day,

(e) cleaning of the resident's bedroom,

(f) laundry services,

(g) transportation to and from local doctor, dentist and optometrist appointments, and

(h) nursing and medication monitoring. You advised that this service is supplied on an "as needed basis" and involves administering medication, monitoring a resident's body temperature and helping with getting into and out of a bathtub. XXXXX.

4. The Facility is not, and is not required to be, licensed or regulated under any health care legislation. There are no specific, established, assessment criteria against which a resident must be tested to gain residency at the Facility, but as mentioned above, you only accept those individuals who are able to get around and are largely able to live independently.

5. You are also employed elsewhere and are therefore not in full time attendance at the Facility. You have hired one person on a part time basis to assist you at the Facility.

Ruling Requested

You are enquiring as to whether you are required to charge the GST in respect of the provision of property and services made under the Lease.

Ruling Given

Based on the facts set out above, we rule that the supply you make under the Lease is exempt under section 6 of Part I of Schedule V to the Excise Tax Act. As such, you are not required to charge the GST in respect of the payments made under the Lease.

This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Goods and Services Tax Rulings. We are bound by this ruling provided that none of the above issues is 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.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 954-4393.

Yours truly,

Hugh Dorward
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

2005/11/29 — RITS 50632 — Application of GST/HST to Purse Winnings