File #11870-1
Ref. ss. 123(1)
HQR0081
Dear sir:
This is in response to an E-mail message of June 3, 1996, from XXXXX, in which he requested confirmation of the GST status of certain supplies of real property involving a residential trailer park. We apologize for the delay in responding.
Questions
What is the GST status of the following transactions:
1) the sale of a vacant site in a residential trailer park, without the provision of any interest in the common areas;
2) the sale of a site in a residential trailer park, without the provision of any interest in the common areas, to an individual who owns a trailer that is situated on the site at the time of the supply and who was renting the site prior to the owner of the trailer park making the supply of the site.
3) the sale of a new mobile home, together will the sale of a single site in a residential trailer park, without the provision of any interest in the common areas;
4) the sale of a site in a residential trailer park, without the provision of any interest in the common areas, together with a used mobile home that was already situated on the site;
5) the sale of a site in a residential trailer park, without the provision of any interest in the common areas, together with a used mobile home that was not previously situated on the site; and
6) the registration of the residential trailer park under the provincial condominium act.
Response
Our response is as follows:
1) The sale of a vacant single site in a residential trailer park without the provision of any interest in the common areas of the trailer park would be taxable, since no exempting provision would apply. The supply of the site would not be exempted by section 5.3 of Part I of Schedule V to the Excise Tax Act (ETA), since it is a supply of separate legally titled land and not a supply of a residential trailer park or of an interest in a residential trailer park. (Please see Policy Paper P-[0]88, entitled "Sale of Single Sites in a Residential Trailer Park). The supply of land would not be exempted by section 9 of Part I of Schedule V, even if the owner of the residential trailer park was an individual because, immediately before the supply, the site was capital property used primarily in a business of the individual, in which there was presumably a reasonable expectation of profit.
2) The supply by way of sale of a single site in a residential trailer park, without the provision of any interest in the common areas is a taxable supply when made to an individual who owns a trailer situated on the site and who was renting the site. Section 9 of Part I of Schedule V would not exempt the supply even if the owner of the residential trailer park was an individual because immediately before the supply, the site was capital property used primarily in a business of the supplier in which there was presumably a reasonable expectation of profit.
3) The sale of a new, unused mobile home would normally be taxable.
The supply of a site in a residential trailer park, without the provision of any interest in the common areas would be taxable. The supply not be exempted by section 5.3 of Part I of Schedule V, since it is a supply of separate legally titled land and not a supply of a residential trailer park or of an interest in a residential trailer park. As previously stated, the supply would not be exempted by section 9 of Part I of Schedule V, because, immediately before the supply, the site was capital property used primarily in a business of the individual in which there was presumably a reasonable expectation of profit.
The provision of a single site in a residential trailer park without an interest in the common areas would be considered to be separate from the supply of the mobile home under the policy on single and multiple supplies as set out in Policy Paper P-[0]77. Although any mobile home is a residential complex, the land on which the mobile home sits is not regarded as subjacent to it, and is therefore not regarded as a part of it, unless the mobile home is permanently affixed to the land. Pursuant to Policy Paper P-104, if a mobile home is permanently affixed to the land in the same manner as a residential complex, we will consider the residential complex to consist of both the mobile home and all the subjacent land that is immediately contiguous to it and is reasonably necessary for the use and enjoyment of the mobile home.
4. As previously stated, the supply of a single site in a residential trailer park, without any interest in the common areas, would be taxable. The sale of a used mobile home would be taxable unless exempted by some provision such as section 2 of Part I of Schedule V to the ETA.
5. The tax treatment of this supply would be the same as for question 4. The supply of the land would be taxable, but the sale of the mobile home may be exempted by section 2 of Part I of Schedule V to the ETA.
6. We cannot determine the GST implications of registering a residential trailer park as a condominium without a detailed explanation of the registration process . For example, does the registration apply to a particular site in a residential trailer park, to the mobile home that sits on the particular site, or to both the site and the mobile home? The answer to this question would affect the GST consequences of various possible supplies, such as selling the mobile home and site together as opposed to separately supplying either the site or the mobile home on its own.
If you require any further information concerning this matter, please contact the undersigned at (613) 952-9211.
D. Dawson
Policy Officer
Financial Institutions and Real Property Division
GST Rulings and Interpretations
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