25 October 2005 GST/HST Ruling 53126 - Tax Status of Supplies Made by XXXXX

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 XXXXX (with attachments), addressed to the GST/HST Rulings Centre in XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the transaction described below. Your request has been forwarded to our office for reply. We have attempted to contact you on several occasions without success. In the interest of providing you with our decision, the following ruling is based on the facts as described below.

All references are to the Excise Tax Act (ETA) unless otherwise noted.

Statement of Facts

Our understanding of the facts and the transaction is as follows:

1. AAA received XXXXX acres of land (PID#111) from XXXXX by Deed XXXXX.

2. AAA transferred two lots to XXXXX, BBB (PID#222) and CCC (PID#333) and transferred the balance of the land (PID#111) to XXXXX DDD by Deeds XXXXX.

3. DDD subsequently made application for subdivision of PID#111 to convey a XXXXX acre part of PID#111 to AAA and XXXXX. The Indenture transferring the XXXXX acre part of PID#111, XXXXX, was registered with the Office of the Registrar of Deeds for XXXXX on XXXXX.

4. The part of PID#111 transferred to AAA and XXXXX is identified as PID#444 on the Plan of Survey #999. This subdivision caused PID#111 to be separated into three parts. For purposes of this ruling, the parts on either side of PID#444 are referred to as Part A and Part B of PID#111.

5. On XXXXX, BBB transferred XXXXX (PID#222) to XXXXX DDD. The Deed of Conveyance was registered with the XXXXX Registry Office on XXXXX. PID#222 was vacant land that was adjacent to and shared two boundary lines with Part B of PID#111.

6. In order to create Lot #555, DDD made an application for Subdividing Land with the Department of XXXXX on XXXXX. The Plan of Survey #999, showing the subdivision of the property of DDD, identifies the boundaries of Lot #555 and was stamped "APPROVED" by the Department of XXXXX on XXXXX, stating: XXXXX. Lot #555 consists of a part of Part B of PID#111 and all of PID#222.

7. PID#222 as it stood prior to enlargement was XXXXX acres in size as provided on the XXXXX Listing. The property assessment value of PID#222, effective XXXXX, was $XXXXX. The property assessment value of PID#111 at XXXXX acres, effective XXXXX, was $XXXXX.

8. Lot #555 identified on the Plan of Survey #999, dated XXXXX, is the subject property for purposes of this ruling. Lot #555 is vacant land, which was sold by DDD to unrelated parties, XXXXX, on XXXXX. Lot #555 contains XXXXX acres of land as shown on the Indenture transferring this land from DDD to XXXXX.

9. The property was not capital property used primarily in a business carried on by DDD and the supply of Lot #555 was not made in the course of a business of DDD.

Transaction

The sale by DDD of Lot #555 located at XXXXX, to XXXXX.

Ruling Requested

You would like to know whether the sale by DDD of Lot #555 was subject to the HST.

Ruling Given

Based on the facts set out above, we rule that the sale by DDD of Lot #555 was taxable.

Explanation

The sale of Lot #555 is excluded from exemption pursuant to paragraph 9(2)(c) of Part I of Schedule V to the ETA as it consists of a sale of real property that includes a part of a parcel of land, which parcel had been subdivided by the individual into more than two parts. Although the real property includes also a part of a parcel of land that was not subdivided or severed by the individual, the sale of the real property is taxable based on the facts provided.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transactions for which you requested a ruling.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9587.

Yours truly,

Béatrice Mulinda
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

2005/10/24 — RITS 58545 — Sale of Former Nursing/Old Age Home