XXXXX
Dear XXXXX:
Thank you for your letter of August 29, 1994, in which you request clarification of the Department's position with respect to the Goods and Services Tax (GST) and the leasing of sites in campgrounds for mobile homes and travel trailers. I apologize for the delay in responding.
The determination of whether the rental of a particular site for a mobile home or travel trailer is exempt from the application of the GST depends on whether the site is in a "residential trailer park" (as defined below). Paragraph 7(a) of Part I of Schedule V to the Excise Tax Act (the "Act") exempts from GST the rental of land, other than a site in a residential trailer park, relating to the use of a "residential unit" where the rental is for a period of at least one month. A "residential unit" is defined in subsection 123(1) of the Act as including a mobile home.
Paragraph 7(b) of that same Part exempts the rental of a site for a period of at least one month relating to the use of a travel trailer, motor home or similar vehicle (hereafter referred to as "home/trailer" for purposes of our discussion) or a mobile home in a "residential trailer park". Both paragraphs require that the mobile home, residential unit or home/trailer be used as a place of residence of an individual as opposed to a recreational property. (Prior to November 5, 1991, the exemption for the rental of a site relating to the use of a home/trailer was not available.)
For purposes of the GST, subsection 123(1) of the Act defines a "residential trailer park" to be a trailer park comprised of at least two sites where 90 percent or more of the sites in the trailer park are leased, or are intended to be leased for a period of at least one month in the case of mobile homes or residential units and twelve months in the case of home/trailers. Further, the sites must be suitable for use by occupants of a mobile home (whether or not the park in fact has mobile homes) as a place of residence of individuals throughout the year. Essentially, this means the sites must be able to be serviced and accessible for use by a mobile home throughout the year.
The legislation does not make reference to the necessity of a mobile home or home/trailer being permanently affixed to a site in a residential trailer park in order for the rental of that site to be exempt. A mobile home, residential unit or home/trailer must merely be situated or intended to be situated on the applicable site and meet the other requirements in order for the exemption to apply. It may be important, however, for purposes of determining whether a particular home/trailer, that is not a mobile home and that is not situated in a residential trailer park, may be considered to be a "residential unit" for purposes of the exemption under paragraph 7(a).
Travel trailers, park model trailers and motor homes are not normally considered to be a "mobile home" within the definition of "mobile home" in subsection 123(1) since they do not meet the dimensional requirements and/or are not designed to be placed or installed on a foundation similar to that of mobile homes and are normally for recreational use. However, if the home/trailer is used for residential purposes and is in fact permanently affixed to land (other than a site in a residential trailer park) in the same manner as a house, that is set on a permanent foundation and not merely placed or situated on the land, it may qualify as a "residential unit". If so, the exemption in paragraph 7(a) of Part I of Schedule V to the Act may apply. Note that where a home/trailer qualifies as a "residential unit" and is situated on a site in a residential trailer park, the rental of the site does not qualify for exemption under paragraph 7(b). Whether a home/trailer is considered a "residential unit" is a question of fact that needs to be determined on the particular circumstances of the situation in question.
Copies of the relevant legislation, as well as a Departmental policy statement on the subject, are attached for your reference. If you require clarification of the above, or have further questions regarding the application of GST, we encourage you to contact the XXXXX[.]
Yours truly,
J.A. Venne
Director
Tax Policy - Special Sectors
GST Policy and Legislation
Attachment
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Stan Farber
John Bain |
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