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XXXXX
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Reg.: XXXXX - Case: HRQ0000553 - NCS: 11950-1
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May 13, 1997
Dear XXXXX
This letter is in response to correspondence of XXXXX which questions if XXXXX is a residential trailer park for GST purposes.
Our understanding of the facts, from XXXXX letter, from my conversation with her on April 17, 1997 and pursuant to the enclosed report provided by an officer of the XXXXX, dated XXXXX is as follows:
Statement of Facts:
• Most of the mobile homes within the residential sites of the XXXXX range in size from XXXXX to XXXXX feet. The sites themselves are much larger.
• The tenants of the XXXXX are taxed by the municipality on their tenant owned improvements to the land. Realty taxes for the sites are paid by the landlord while realty taxes for the mobile homes are paid by the owners of the homes.
• The hydro costs and home realty taxes regarding the sites are collected by the landlord and are paid to the hydro company and the tax office.
• Tenants who reside at the XXXXX throughout the year are charged a monthly rent while tenants who reside there primarily on a seasonal basis are charged an annual rent.
• The year round tenants are not charged an amount for winter storage. The tenants with a principal residence at a different location pay a storage fee and their homes remain on a site for 12 months a year.
• The invoices to tenants are not standardized. Some indicate an amount payable for rent (for a year), others indicate an amount payable for a monthly rent while others indicate an amount payable for a season fee. Not all invoices indicate that the annual rent rate is made up of a seasonal rate and a winter storage fee.
• There are shareholders in the land owning company named XXXXX[.]
• Shareholders pay a maintenance fee to the landlord company but are not charged rent and are not required to be residents of the complex. Shareholders are designated the use of a site or sites in the XXXXX, depending on the number of shares purchased. Shareholders do not hold title to a specific site.
• Pursuant to the unsigned residency agreement and the "Offer to purchase common shares in the capital of XXXXX[.]
• The resident agrees to purchase from XXXXX and XXXXX agrees to sell the shares in the capital of XXXXX[.]
• For the consideration of XXXXX paid by the shareholding member of XXXXX to XXXXX, the shareholder receives an exclusive residency right for himself, his invitees, tenants and lessees to use and occupy a lot (the agreement allows for a space for the allotment of a specific lot number).
• Upon expiry of the original term of the residency agreement, each shareholder may request a renewal for a further period of XXXXX.
• The right to use and occupy the lot is exclusive to the shareholder. The shareholder and his invitees, tenants and lessees shall have free access to and from his lot over any part of the lands except to the extent that such access may interfere unreasonably with the common use and enjoyment of the lands by its members or with the use and occupancy by any other shareholder and his invitees, tenants and lessees of such shareholding member's lot.
• The shareholding member shall pay all assessments made by XXXXX with respect to the maintenance and repair of the common elements of the lands including municipal taxes otherwise than those assessed against an individual lot, garbage collection, snow removal, road repair, sewage treatment and disposal, grass cutting, the planting, cutting or removal of trees, shrubs or other plants, drains, pipes, ditches, and utilities.
• The agreement doesn't convey any right, title or interest in or to the lands. The title to the trailer located on the lot is vested in the shareholding member as personal property and is not a fixture.
• A shareholder shall be a member who holds common shares of XXXXX and has entered into a residency agreement with XXXXX with respect to a lot.
• There are XXXXX active sites that are seasonal or year round sites. None of these are 'camp' sites for short term campers because of a ruling by the XXXXX[.]
• There are XXXXX year round sites occupied by tenants.
• Seasonal tenants usually stay for much shorter periods than the complete season which runs approximately from XXXXX[.]
• The seasonal sites have their water systems drained in the winter as the homes would suffer significant damage if the water systems for seasonal units were not shut off. The owners of the homes are able to inspect their property throughout the year.
• The sites are occupied by mobile homes as well as various structures ranging from XXXXX[.] None of the structures are moved from the sites.
• Photographs filed by the tenants of the sites show that XXXXX[.]
• All units located in XXXXX[.]
• XXXXX
(a) accommodation provided to the traveling and vacationing public in a hotel, motel or motor hotel, resort, lodge, tourist camp, cottage or cabin establishment, inn, campground, trailer park, tourist home, bed and breakfast vacation establishment or farm vacation home; or
(b) living accommodation occupied as a vacation home for a seasonal or temporary period not exceeding XXXXX[.]
Interpretation Requested:
Your representation is that the XXXXX qualifies as a residential trailer park in accordance with the definition outlined in subsection 123(1) of the Excise Tax Act (the Act) and that the site rentals should qualify for exemption from the GST in accordance with the provisions of paragraph 7(b) of Part I of Schedule V to the Act.
Interpretation Provided:
For GST purposes a "residential trailer park" is defined in subsection 123(1) of the Act as a trailer park comprised of at least two sites where 90% or more of the sites in the trailer park are leased for a period of at least one month in the case of mobile homes or dwellings affixed to the land, and 12 months in the case of travel trailers and motor homes. Further, the site must be suitable for use by occupants of a mobile home (whether or not the park in fact has mobile homes) as a place of residence for individuals throughout the year. This means the sites must be able to be serviced and accessible for use by a mobile home owner throughout the year.
Specifically, subsection 123(1) of the Act states that a "residential trailer park" means "the land that is included in a trailer park of the person or, where the person has two or more trailer parks that are immediately contiguous to each other, the land that is included in those contiguous trailer parks, and any buildings, fixtures and other appurtenances to the land that are reasonably necessary for
(a) the use and enjoyment of site in the trailer parks by individuals residing in or occupying mobile homes, or travel trailers, motor homes or similar vehicles or trailers, situated or to be situated on those sites, or
(b) the purpose of engaging in the business of supplying those sites by way of lease, licence or similar arrangement, but does not include such land and appurtenances or any part o them unless the land encompasses at least two sites and all or substantially all of the sites in the trailer parks
(c) are supplied, or are intended to be supplied, by way of lease, licence or similar arrangement under which continuous possession or use of a site is provided for period of at least
(i) one month, in the case of mobile home or other residential unit, and
(ii) twelve months, in the case of a travel trailer, motor home or similar vehicle or trailer that is not a residential unit, and
(d) if the sites were occupied by mobile homes, would be suitable for use by individuals as places of residence throughout the year".
A trailer is not defined in the Act for GST purposes, however, a "mobile home" is defined in subsection 123(1) of the Act as a completed or substantially completed building that is equipped with complete plumbing, electrical and heating facilities and that is designed to be moved to a site for installation on a foundation and connection to service facilities at that site to be occupied as a place of residence. A mobile home does not include any travel trailer, motor home, camping trailer or other vehicle or trailer that is for recreational use.
As per my conversations with XXXXX XXXXX and due to the inability of the Department to compile the complete facts and statistics regarding the XXXXX, we are unable to provide you with a definitive response regarding the determination of whether the XXXXX is a residential trailer park for purposes of the GST. However, we would like to offer the following comments based on certain assumptions made from the information provided. In this regard, it appears that the XXXXX meets the necessary conditions and therefore qualifies as a "residential trailer park" pursuant to subsection 123(1) of the Act.
XXXXX active sites are occupied by tenants year round. This would mean these XXXXX tenants would be charged a monthly rental while the remainder of the tenants would be charged an annual rental as they reside there primarily on a seasonal basis. Although we have been unable to determine exactly how many sites are occupied by mobile homes, travel trailers, and various other residential, we do know that none of the structures are moved from the sites and it is our understanding that most of the structures are affixed to the land and have been installed in a somewhat permanent fashion (i.e. decks, permanent room additions, cottage style roofs, etc.). The definition of a "residential trailer park" lists the criterion that 90% or more of the sites in the park must be supplied for more than one month for mobile homes and other residential units, and for XXXXX months for travel trailers and other units. If the remainder of the tenants are leasing the sites under an annual rental, this would mean that XXXXX of the sites are leased for XXXXX months. If these presumptions prove to be incorrect, this interpretation may change and the XXXXX will be excluded from the definition of a "residential trailer park".
Pursuant to the report from the XXXXX XXXXX, XXXXX. However, according to our conversation of April 17, 1997, it is your understanding that all the sites within the XXXXX have winterized water systems (with below ground pipes). If it can be shown that more than XXXXX of the sites are not winterized (in regards to water systems, etc.), then the XXXXX may also fall in to the exclusion from the definition of a residential trailer park. However, the fact that the water systems are shut off and drained due to lack of use at some seasonal sites does not mean that the sites are not able to be serviced the entire year.
Sites in a residential trailer park are exempt from the GST when they are provided for continuous possession or use for at least one month to the owner, lessee or occupant of a mobile home or a travel trailer, motor home or similar vehicle or trailer that is situated, or is to be situated, on the site. Paragraph 7(b) of Part I of Schedule V to the Act exempts pad rentals in a mobile home park or a long-term ground lease on which a residence is situated.
If you can obtain further information to definitively determine that the XXXXX qualifies as a residential trailer park for GST purposes, site rentals for a minimum of 1 month to the applicable units qualify for exemption from the GST pursuant to paragraph 7(b) of Part I of Schedule V to the Act.
If you require any further information concerning this matter, please contact me at (613) 952-9214.
Yours truly,
Doris Rist
Real Property
Rulings and Interpretations
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