23 March 2017 CBA Commodity Taxes Roundtable, Q.21

Mr. A no longer wishes to purchase a new home and has agreed to assign the agreement of purchase and sale to Mr. B for $150,000 (representing the appreciation over the purchase price of $250,000) plus GST/HST. On closing, title is transferred directly by the builder to Mr. B. Can Mr. B assign the rebate to the builder pursuant to s. 254(4)? CRA responded:

Although the new housing rebate cannot be assigned per se to a builder, generally the builder who has sold the housing may, pursuant to subsection 254(4), pay or credit the amount of the rebate to the individual purchaser. However, in the situation where there are two builders, such as in your example, the individual purchaser (that is, Mr. B) could file a rebate directly with the Canada Revenue Agency.

Mr. A no longer wishes to purchase a new home and has agreed to assign the agreement of purchase and sale to Mr. B for $150,000 (representing the appreciation over the purchase price of $250,000) plus GST/HST. On closing, title is transferred directly by the builder to Mr. B. How would the value of the consideration for the rebate be calculated? CRA responded:

[T]he formula outlined in paragraph 254(2)(i) … makes reference to the “total consideration” … described in paragraph 254(2)(c) … [as] the sum of the consideration payable for the housing itself (that is, the purchase price of $250,000) and the consideration payable for any other taxable supply of an interest in the housing (that is, the assignment fee of $150,000). …[I]f Mr. A [instead] were not a builder, his assignment of the agreement of purchase and sale would be an exempt supply … and the consideration for the exempt assignment would not be included in determining the “total consideration” as described in paragraph 254(2)(c). …