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XXXXX
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March 28, 1996
XXXXX
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Dear sir:
This is in response to your facsimile message of March 11, 1996, to Mr. John Bain, concerning the definition of a floating home for GST purposes.
Facts
1. The structure at issue consists of a trailer attached to a floating platform, which is situated in XXXXX harbour. The platform is approximately XXXXX metres wide and XXXXX metres long, and is supported in the water by styrofoam floats covered in thin plastic sheets. The trailer is approximately XXXXX metres wide and XXXXX metres long, and appears to have been originally designed for use as a travel trailer. The wheel and axle assemblies have been removed from the trailer, and it has been attached to a wooden platform by means of wooden beams, heavy metal brackets and metal bolts. It has electrical, heating and plumbing facilities that have been adapted to make it suitable for use as a place of residence.
2. The occupant of the structure is charged a monthly fee by the wharf master for use of the mooring facilities. The structure remains stationary at its moorings and is not suitable for self-propulsion. Nor could it be easily adapted for self-propulsion.
3. The structure has been used as a floating home for approximately XXXXX years, apparently at the same location at XXXXX[.] The occupant receives a monthly bill from the wharf master for the use of the mooring facilities at the wharf. The monthly bill includes GST, because the occupant has not provided evidence that the supply is exempt of tax.
Question
1. Should the structure be considered a travel trailer or similar structure for GST purposes?
2. If the structure is not considered a travel trailer or similar structure for GST purposes, is it a floating home as defined in subsection 123(1) of the Excise Tax Act (ETA)?
3. If the structure is a floating home for GST purposes, would the monthly harbour fees for using the mooring facilities be exempted from GST pursuant to section 13.2 of Part I of Schedule V to the ETA?
4. If it is decided that the structure at issue qualifies as a floating home, does this create an anomaly in the GST treatment of travel trailers, given that a travel trailer that had its axles and wheels removed would not be considered a mobile home?
Response
1. The structure was designed as a travel trailer. However, it will no longer be treated as a travel trailer or similar structure for GST purposes, because the wheel and axle assemblies have been removed and it has been permanently attached to a wooden platform by means of wooden beams, heavy metal brackets and metal bolts. Therefore, it no longer corresponds with the normal description of a travel trailer.
2. The structure fits within the definition of "floating home" in subsection 123(1) of the ETA. The subsection states that a floating home is
"a structure that is composed of a floating platform and a building designed to be occupied as a place of residence for individuals that is permanently affixed to the platform, but does not include any free-standing appliances or furniture sold with the structure or any structure that has means of, or is capable of being readily adapted for, self-propulsion".
The information provided indicates that the structure at issue is composed of a travel trailer that is permanently affixed to a floating platform. The travel trailer fits the definition of "building" in Black's Law Dictionary, which is as follows.
"Structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education and the like. A structure or edifice enclosing a space within its walls, and usually, but not necessarily, covered by a roof."
The building was originally designed to be occupied as a place of lodging, rather than as a place of residence for individuals. However, the original design was modified by the removal of the wheel and axle assemblies, the affixing of the structure to the floating platform and the changes to the electrical, heating and plumbing facilities. The building is currently suitable for occupation as a place of residence rather than a place of lodging. Also, the information provided indicates that the structure does not currently have the means of self-propulsion and is not capable of being readily adapted for such a purpose. Therefore, the structure meets all the criteria for a floating home.
3. The supply of mooring facilities would be exempted by reason of section 13.2 of Part I of Schedule V to the ETA, which exempts a supply made to a person who is the owner, lessee or person in occupation or possession of a floating home, of a right to use mooring facilities or a wharf for a period of at least one month in connection with the use and enjoyment of the home as a place of residence for individuals. The situation at issue seems to meet all the necessary requirements, and the fact that the floating home was constructed partially from a travel trailer does not invalidate the exemption. Accordingly, you may wish to advise the owner of the floating home how to recover GST previously paid to the wharf master in respect of mooring fees.
4. The tax treatment of this particular floating home does not create any anomaly in the tax treatment of travel trailers. Policy Paper #104 states that, if a travel trailer is permanently affixed to the land in the same manner as a house, is on a permanent foundation and is used as a place of residence, it may qualify as a residential unit.
Therefore, it is reasonable to state that, where a travel trailer is permanently affixed to a floating platform in a manner similar to a floating home and meets all the other criteria for a floating home, it is a floating home for GST purposes.
If you require any further information concerning this matter, please contact Mr. Don Dawson at 952-9211.
J.A. Venne
Director
Special Sectors
GST Rulings and Interpretations
File #11950-1
Ref. s. 8.1/V/I
(DD) Document #2885
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