Please note that the following document, although correct at the time of issue, may not represent the current position of the Canada Revenue Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence du revenu du Canada.
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 140659R
Business Number: […]
September 18, 2012
Dear [Client]:
Subject: GST/HST RULING
[…][Supply of a Park Model Trailer]
Thank you for your letter of March 8, 2012, […] concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the sale of a park model trailer. Your request for reconsideration has been forward[ed] to the Excise and GST/HST Rulings Directorate in Ottawa for our response.
HST applies at the rate of 15% in Nova Scotia, 13% in Ontario, New Brunswick, and Newfoundland and Labrador, and 12% in British Columbia. GST applies at the rate of 5% in the remaining provinces and territories.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
SUMMARY OF FACTS
On [mm/dd/yyyy], a ruling was issued under case […] [A] to […] (the “Purchaser”) who, under […] (the “Agreement”), purchased a park model trailer situated on lot #[…] at […], [which is operated by the Corporation], for $[…] plus HST. Under the Agreement, the GST/HST on the sale of the park model trailer was collected by […] (the Agent), […]. The ruling provided that the sale of the park model trailer in question was exempt from the HST under section 5.1 of Part I of Schedule V to the ETA.
With the consent of the Purchaser, a request for reconsideration of the ruling provided to the Purchaser in case [A] was submitted by […] [the representative] of the Corporation. In his letter of [mm/dd/yyyy], [the representative] provided additional information and requested that CRA reconsider the ruling issued to the Purchaser.
On [mm/dd/yyyy], following a thorough review of the information provided by the Purchaser and the additional information provided by the Corporation, CRA issued its ruling to the Corporation in case […] [B] confirming that the sale of the park model trailer to the Purchaser is exempt from the HST under section 5.1 of Part I of Schedule V to the ETA.
In this current submission dated March 8, 2012, you provide your views and comments with respect to the ruling issued to the Corporation in case [B]. It is your view that the ruling issued in case [A] and subsequently confirmed in case [B] is inconsistent with the guidelines set out in GST/HST Policy Statement P-104, Supply of Land for Recreational Units such as Mini-homes, Park Model Trailers and Travel Trailers, and that as such the sale of the park model trailer in question should not be viewed as an exempt supply under section 5.1 of Part I of Schedule V to the ETA. You indicate that the question to be determined is whether a recreational unit is a “similar premise” under paragraph (c) of the definition of “residential unit” in subsection 123(1).
RULING REQUESTED
The ruling issued in case [B], confirming that the sale of the park model trailer to the Purchaser is exempt from the HST under section 5.1 of Part I of Schedule V to the ETA, should be reversed.
RULING GIVEN
Taking into consideration the comments set out in your letter of March 8, 2012, and the review of the rulings issued in cases [B] and [A], we confirm the prior ruling issued to the Corporation in case [B]. The purchase of the […] park model trailer under the Agreement by the Purchaser from […] [the vendors], through the Agent, is exempt from the HST under section 5.1 of Part I of Schedule V to the ETA.
This ruling is subject to the qualifications in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service. We are bound by this ruling provided that none of the above issues are currently under audit, objection, or appeal, that no future changes to the ETA, regulations or our interpretative policy affect its validity, and all relevant facts and transactions have been fully disclosed.
EXPLANATION
Section 5.1 of Part I of Schedule V to the ETA provides, in part, that the sale of a building in which one or more residential units are located is exempt if:
• both immediately before and immediately after the earlier of the time ownership of the building is transferred to the purchaser and the time possession of the building is transferred to the purchaser under the agreement for the sale, the building forms part of a residential complex; and
• immediately after the earlier of the time ownership of the building is transferred to the purchaser and the time possession of the building is transferred to the purchaser under the agreement for the sale, the purchaser is the recipient of an exempt supply of land under subparagraph 7(a)(i) of Part I of Schedule V to the ETA included in the complex.
Under certain circumstances, as outlined in GST/HST Policy Statement P-104, a recreational unit such as a park model trailer may be considered a “similar premises” under paragraph (c) of the definition of “residential unit”. It is a question of fact whether a particular recreational unit is considered to be a “similar premises” under paragraph (c) of the definition of “residential unit”. Such determination is made on a case-by-case basis taking into account the particular facts and circumstances.
In accordance with GST/HST Policy Statement P-104, the park model trailer in question meets the requirements of “residential unit” as defined in subsection 123(1) of the ETA. Based on the facts of the case, the park model trailer is affixed to the land and used as a place of residence in accordance with subparagraph 7(a)(i) of Part I of Schedule V to the ETA.
A residential unit which is affixed to land and used as a place of residence for individuals is generally considered to be a “residential complex”. The sale of a previously occupied unit, such as a park model trailer, that meets the definition of “residential complex” may be subject to the exempting provisions under Part I of Schedule V to the ETA. In this case, section 5.1 of Part I of Schedule V to the ETA is applicable and as such exempts the sale of the park model trailer in question.
For your convenience, find enclosed a copy of GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service.
We trust that this now resolves the question.
Yours truly,
Ivan Bastasic
Director
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
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