CRA indicates that the FMV of an addition to a MURC does not include any portion of the underlying land

A builder who constructs an “addition” to a multiple unit residential complex (“MURC”) may be required to self-assess for the fair market value of the addition pursuant to s. 191(4). CRA indicated that where there is an internal reconfiguration of units within a MURC resulting in new residential units but not in an expansion of the building envelope, it does not consider there to be the construction of an addition to a MURC (so that there is no self-supply under s. 191(4).)

Conversely, CRA considers that where there is an addition of residential units through an expansion of the MURC building envelope, there will be the construction of one or more “residential units” for s. 191(4) purposes. In this regard, it indicated that the fair market value of the addition would not include that of the land if the addition was constructed on land contiguous to the existing building and that was reasonably necessary for the use and enjoyment of that building as a place of residence for individuals.

Neal Armstrong. Summary of 7 April 2022 CBA Roundtable, Q.8 under ETA s. 191(4).