Services in relation to real property
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Services in relation to real property
The general rules for supplies of services will not apply to supplies of services in relation to real property. New place of supply rules apply to supplies of services in relation to real property.
A supply of a service in relation to real property that is situated in Canada that is situated primarily (more than 50%) in the participating provinces will be considered as having been made in a participating province if the real property in Canada to which the service relates is situated primarily (more than 50%) in the participating provinces. The supply will be considered as having been made in the participating province in which the greatest proportion of the real property is situated.
Example
An Ontario company hires a Quebec company to paint its warehouse in Ontario. The real property that is situated in Canada to which the service relates is situated primarily in the participating provinces and the participating province in which the greatest proportion of the real property that is situated in the participating provinces is situated in Ontario. The supply of the service is made in Ontario and the HST will apply at a rate of 13%.
If the greatest proportions of the real property are situated in two or more participating provinces, the supply is made in the participating province, among those in which the greatest proportions of the real property are situated, for which the rate of the provincial part of the HST is highest. In such cases where the provincial part of the HST is the same, the supplier will use that particular rate.
Example
A property management company is hired to provide property management services for real property situated in three provinces. 40% of the real property is situated in Ontario, 40% of the real property is situated in Prince Edward Island and 20% of the real property is situated in Alberta. The real property in Canada is therefore situated primarily (more than 50%) in participating provinces and the greatest proportions of the real property are situated in Ontario and Prince Edward Island. Between Ontario and Prince Edward Island, the tax rate for Prince Edward Island is greatest. As a result, the supplier will charge the HST at a rate of 15%.
A supply of a service in relation to a real property will be considered to be made in a non-participating province if the real property in Canada to which the service relates is not situated primarily (more than 50%) in participating provinces.
Services in relation to real property in Canada and outside Canada
A supply of a service that relates to real property is considered to be made in Canada if the real property is situated in Canada, and is considered to be made outside Canada if the real property is situated outside Canada. As a result, where a supply of a service that relates to real property is made and the real property is both situated in Canada and outside of Canada, the proportion of the service that relates to the real property that is situated in Canada is considered to be made in Canada and the proportion of the service that relates to the real property that is situated outside Canada is considered to be made outside Canada. As a result, it is only the provision of the proportion of the service that relates to real property that is situated in Canada that may be considered to be made in a participating province and subject to the HST.
Forms and publications
- Date modified:
- 2016-09-30