CRA confirms that there are no ITCs for appliances acquired during the construction of a rental residential complex

CRA confirmed that since appliances and common area furniture and equipment that are acquired in connection with the construction of, say, a residential complex such as an apartment building and which do not become fixtures, will be considered to have been acquired for the purpose of the intended exempt rental of the completed units, no input tax credits will be available. Implicitly, personal property that becomes fixtures will instead be part of the real property that becomes subject to the deemed taxable self-supply under s. 191(3), so that their acquisition prior to such self-supply will generate ITCs.

CRA also summarized the tests it considered should be applied in determining whether, at common law, personal property has become a fixture.

Neal Armstrong. Summaries of 7 April 2022 CBA Roundtable, Q.3 under ETA s. 191(3) and s. 123(1) – real property.