20 October 2003 GST/HST Ruling 47772 - Purchase of Vacant Land

Dear XXXXX:

Thank you for your fax XXXXX concerning the application of the Goods and Services Tax (GST)/Harmonized Sales Tax (HST) to the purchase of XXXXX acres of vacant land XXXXX.

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

Statement of Facts

From your facsimile XXXXX and your subsequent e-mail XXXXX, our understanding of the facts is as follows:

1. You are the purchaser of a XXXXX acres parcel of land described as XXXXX. The anticipated closing date for the transaction is XXXXX.

2. The vendor is an individual, XXXXX.

3. The XXXXX acres parcel of land is one-half of an entire original township lot, which has not been previously severed by the vendor.

4. The land is vacant. There has never been any structure on the land.

5. An XXXXX-acre portion of land is currently used and harvested informally by a neighbouring farmer. The vendor has not charged or received any consideration with respect to the XXXXX acres. The remainder of the land has been used by the vendor for recreational or leisure purposes.

6. The real property is not capital property used primarily by the vendor in making taxable supplies of real property by way of lease, licence or similar arrangement.

7. The sale of the real property by the vendor is not being made in the course of a business of the individual.

Ruling Requested

Whether the sale of real property described above is subject to the GST/HST.

Ruling Given

Based on the facts set out above, we rule that the supply of the real property described as XXXXX, by the vendor, XXXXX is an exempt supply pursuant to section 9 of Part I of Schedule V of 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.

Should you have any further questions or require clarification on the above matter, please do not hesitate to contact me at (613) 952-9212.

Yours truly,

Carmela Antonelli

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