XXXXX
This is in response to your correspondence of October 28, 1994. You have requested clarification of the application of section 121 of the Excise Tax Act (the "Act") where there are two different claimants in respect of separately filed FST new housing rebates for the same properties. We apologize for the delay in responding.
Statement of Facts
1. The two claimants for the FST new housing rebates in respect of the same two blocks of residential condominium units, which constitute two separate condominium complexes (the "complexes"), are XXXXX (hereafter referred to as XXXXX) and XXXXX (hereafter referred to as XXXXX[).]
2. XXXXX had possession and legal title of the unoccupied complexes prior to 1991. They continued to have possession and held legal title to the units until September 23, 1992.
3. XXXXX filed two FST new housing rebate claims in prescribed form and manner in respect of the units in the complexes on April 14, 1992.
XXXXX
The claims were approved and payment in the amount of XXXXX for both complexes was made on July 26, 1993, to XXXXX.
4. On September 23, 1992, a XXXXX was registered pursuant to the XXXXX providing XXXXX with retroactive ownership of the complexes effective April 16, 1987. Pursuant to that agreement, XXXXX took possession of the complexes from XXXXX on September 23, 1992.
5. XXXXX filed their FST new housing rebate claims in prescribed form and manner in respect of the same two complexes on June 10, 1993. The claims were disallowed as claims in respect of the complexes had already been filed by XXXXX. XXXXX subsequently filed an appeal.
Interpretation Requested
Which of the two persons, XXXXX or XXXXX is entitled to claim the FST new housing rebates in respect of the two complexes?
Interpretation Given
The FST new housing rebates in respect of the two complexes have been properly paid to XXXXX assuming all necessary conditions of subsection 121(3) of the Act were satisfied and the rebate claim was filed in prescribed form and manner. Accordingly, XXXXX is not entitled to the FST new housing rebates for the same complexes by virtue of subsection 121(4) of the Act.
Analysis
Section 121 of the Act provides for a rebate in respect of certain new housing that was under construction before 1991. For purposes of section 121, subsection 121(1), defines a "specified residential complex" to include a residential condominium unit. By virtue of subsection 123(1), both XXXXX and XXXXX (assuming XXXXX is a builder by virtue of its retroactive ownership) are considered to be "builders" of the specified residential complexes immediately before 1991.
Subsection 121(3) of the Act outlines the conditions that must be satisfied in order to determine eligibility for the FST new housing rebate in respect of a specified residential complex. Subsection 121(3) states that:
... Where, immediately before 1991, a builder of a specified residential complex ... owned or had possession of the complex and had not transferred ownership or possession under an agreement of purchase and sale to any person who is not a builder of the complex, the Minister shall, subject to subsection (4) and (4.1) pay a rebate to the builder. ...
Subsection 121(4) of the Act goes on to state:
... A rebate in respect of a residential complex shall not be paid under this section to a person where the person fails to apply to the Minister for the rebate in prescribed form and manner before 1995 or where a rebate under this section in respect of the complex was paid to any other person entitled thereto. ... (Italics added for emphasis.)
Based on the aforementioned provisions, it appears both XXXXX and XXXXX (assuming XXXXX is a builder) satisfy the requirements for the FST new housing rebate pursuant to subsection 121(3) of the Act. However, subsection 121(4) of the Act makes it clear that only one rebate in respect of a given property shall be paid.
The final phrase of subsection 121(4) of the Act which reads, "... where a rebate under this section in respect of the complex was paid to any other person entitled thereto ...", envisions a situation where two or more persons may be eligible for a FST new housing rebate in respect of the same complex. In our view, where two persons satisfy the conditions of subsection 121(3) of the Act in respect of the same property, the first person to file a claim in prescribed form and manner would normally be entitled to the FST new housing rebate. XXXXX filed for the rebate on April 14, 1992, some XXXXX prior to XXXXX Accordingly, assuming XXXXX did satisfy the conditions of subsection 121(3) of the Act and did file in prescribed form and manner, it should be paid the rebate. Given that the amount has been properly paid to XXXXX, XXXXX would no longer be entitled to payment of the rebate in any event by virtue of subsection 121(4) of the Act.
We hope this information will be of assistance to you. If you have further questions regarding this letter, please do not hesitate to contact Stan Farber at (613) 954-3772 or John Bain at (613) 954-8852.
J.A. Venne
Director - Tax Policy
Special Sectors
GST Policy and Legislation
| c.c.: |
Stan Farber
John Bain
XXXXX |
File #11950-1
Ref. s. 20 & 25/VI/V
Document #1492
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