8 March 2005 GST/HST Ruling 58291 - Supply of Laundry Facilities by Condominium Corporation

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.

Dear XXXXX:

Thank you for your letter XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to supplies made by your client, a residential condominium corporation (RCC), to its residential condominium unit owners and lessees.

All legislative references are to the Excise Tax Act (ETA) unless otherwise noted.

Statement of Facts

Our understanding of the facts, based on your letter XXXXX and follow-up phone conversation, is as follows:

Your client, an RCC, operates a condominium complex that contains XXXXX residential condominium units in one building. The RCC owns and supplies laundry facilities, which consist of washers and dryers, to its residential condominium unit owners and lessees. The RCC collects approximately $XXXXX per year from fees charged for use of the washers and dryers. The laundry facilities are located within the building and are available only for the use of condominium unit owners and lessees.

Ruling Requested

What is the application of GST to the supply of washing machines and clothes-dryers for use by condominium unit owners and lessee?

Ruling Given

Based on the facts set out above, we rule that the supply of washing machines and clothes-dryers located in the condominium complex for use by condominium unit owners and lessees is an exempt supply under section 13.3 of Part I of Schedule V to the ETA.

This ruling is subject to the general limitations and qualifications outlined in section 1.4 of Chapter 1 of the GST/HST Memoranda Series. We are bound by this ruling provided that none of the above issues is currently under audit, objection, or appeal; that there are no relevant changes in the future to the Excise Tax Act, or to our interpretative policy; and that you have fully described all necessary facts and transaction(s) for which you requested a ruling.

Explanation

In general, section 13 of Part I of Schedule V exempts the supply of property or a service by a residential condominium corporation, where the supply is made to an owner or lessee of a residential condominium unit described on the condominium plan, if the property or service relates to the occupancy or use of the unit.

More specifically, with respect to the supply of the right to use a washing machine or clothes-dryer, section 13.3 of Part I of Schedule V exempts the supply to a consumer where the machines are located in a common area of the residential complex. Under subsection 123(1), a "condominium complex" means a residential complex that contains more than one residential condominium unit.

Given that the supply of the right to use the washers and dryers is exempt, the RCC is not entitled to claim input tax credits in respect of GST paid on goods and services obtained for use in providing such supplies to residential condominium unit owners and lessees.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at 952-9212.

Yours truly,

Carmela Antonelli
Real Property Unit
Financial Institutions and Real Property Division
Excise and GST/HST Rulings Directorate

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