Please note that the following document, although correct at the time of issue, may not represent the current position of the Agency. / Veuillez prendre note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'Agence.
XXXXX
XXXXX
XXXXX
Excise and GST/HST Rulings Directorate
Place de Ville, Tower A, 15th floor
320 Queen Street
Ottawa ON K1A 0L5
Case Number: 118630
July 22, 2010
Dear XXXXX:
Subject:
GST/HST INTERPRETATION
Sale of a strata lot
Thank you for your letter of XXXXX, concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the sale of a strata lot.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
We understand that:
1. You entered into a written agreement of purchase and sale for the sale of a strata lot (a residential condominium unit) with XXXXX (the Vendor) on XXXXX.
2. The condominium unit is one of the units in XXXXX.
3. The ownership and possession of the condominium unit will be transferred to you on or around August XXXXX, 2010.
4. The purchase price for the condominium unit is $XXXXX.
5. The condominium complex was constructed by XXXXX.
6. Upon completion of the construction of the complex, XXXXX.
7. XXXXX will transfer the property to XXXXX.
8. Following XXXXX, XXXXX will make repairs and complete the construction of the condominium units before they are sold to the Vendor.
Ruling Requested
You would like to know if you have to pay GST/HST on the acquisition of the residential condominium unit.
Interpretation Given
We are not able to provide a ruling as you have requested because additional information with respect to the Vendor is required. We are however able to provide you with the following interpretation.
The tax status of the sale of the condominium unit will depend on whether or not the Vendor is a builder of the unit for GST/HST purposes.
Based on the information provided, it is possible that the Vendor is a builder of the condominium unit pursuant to paragraph (d) of the definition of "builder" in subsection 123(1). This paragraph provides, in part, that a person is a builder of a residential complex if:
• the person acquires an interest in the complex before it has been occupied by an individual as a place of residence or lodging; or
• in the case of a condominium complex or residential condominium unit, before the complex is registered as a condominium,
for the primary purpose of making one or more supplies of the complex, or parts of the complex, or interests in the complex by way of sale.
If the Vendor is a builder of the condominium unit, the supply by the Vendor to you would be a taxable supply as no exemption would apply. In this case, the supply of the condominium unit to you would be subject to the GST at 5% since the agreement of purchase and sale was entered into with the Vendor before November 18, 2009. The provincial part of the HST would not apply to your purchase of the condominium unit even though both ownership and possession of the condominium unit are transferred to you after July 1, 2010.
You would not be entitled to claim the GST/HST new housing rebate in respect of the GST paid to acquire the condominium unit as the consideration payable for the unit is over $450,000.
You would also not be entitled to claim the XXXXX new housing rebate in respect of the provincial part of the HST since your purchase of the condominium unit is not subject to the provincial part of the HST.
The foregoing comments represent our general views with respect to the subject matter of your request. These comments are not rulings and, in accordance with the guidelines set out in GST/HST Memorandum 1.4, Excise and GST/HST Rulings and Interpretations Service, do not bind the Canada Revenue Agency with respect to a particular situation. Future changes to the ETA, regulations, or our interpretative policy could affect this interpretation.
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 613-952-9587. Should you have additional questions on the interpretation and application of GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Béatrice Mulinda
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate
UNCLASSIFIED
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