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.
GST/HST Rulings Directorate
Place de Ville, Tower A, 5th floor
320 Queen Street
Ottawa ON K1A 0L5
[Addressee]
Case Number: 239048
Dear [Client]:
Subject: GST/HST RULING
Application of GST/HST to the lease of a site where a mini-home is situated
Thank you for your correspondence of [mm/dd/yyyy], concerning the application of the goods and services tax/harmonized sales tax (GST/HST) to the lease of a site where your mini-home is situated.
The HST applies in the participating provinces at the following rates: 13% in Ontario; and 15% in New Brunswick, Newfoundland and Labrador, Nova Scotia, and Prince Edward Island. The GST applies in the rest of Canada at the rate of 5%.
All legislative references are to the Excise Tax Act (ETA) unless otherwise specified.
STATEMENT OF FACTS
Based on the information you provided on [mm/dd/yyyy], as well as our phone conversation on [mm/dd/yyyy], we understand the following:
1. The Park was a campsite located at [Address 1]. The Park was offering trailer site rentals to members.
2. The Park was open from April 1st to October 31st each year.
3. You started renting trailer site [...] (the “Site”) on [mm/dd/yyyy]. You have been leasing the Site on a one-year term, renewable annually. You initially installed a travel trailer on the Site.
4. In [yyyy], you built a mini-home on the Site to replace the trailer.
5. Your mini-home was 25 ft long, 22,8 ft wide and 14,7 ft tall. It was equipped with a complete kitchen containing a propane stove, had one bathroom, two bedrooms, a living room and a loft that provided an additional sleeping area. It was serviced with electrical and municipal water facilities. The wood structure was built on concrete blocks. You provided photos of your mini-home.
6. Since it had been built, you resided in the mini-home for varying amounts of time, often 4 to 5 days a week during the open season each year until the park was closed in [mm/yyyy].
7. The Park officially ceased its activities in [mm/yyyy] and […][required that] all structures and trailers be removed from the sites.
8. Your mini-home was sold […] [and moved in yyyy]. [….
9. Your last invoice for the site rental fees is dated [mm/dd/yyyy], and was paid in [mm/yyyy].
RULING REQUESTED
You would like to know if the rental of the Site on which your mini-home was situated was subject to the GST/HST.
RULING GIVEN
Based on the facts set out above, we rule that the rental fees for the Site where your mini-home was situated are consideration for a supply of land that is exempt of the GST/HST under subparagraph 7(a)(i) of Part I of Schedule V to the ETA.
EXPLANATION
Subparagraph 7(a)(i) of Part I of Schedule V to the ETA provides that a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement that provides for continuous possession or use of the land for at least one month is exempt if the supply is made to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals.
Subsection 123(1) defines the term "residential unit" to include a house, semi-detached house, mobile home or "any other similar premises". Whether a particular unit has the same permanent residential characteristics as a house such that it is considered to be a "residential unit", is affixed to the land, and is used as a place of residence for individuals is determined on a case-by-case basis taking into consideration the facts and circumstances of the particular case.
Based on the facts referred to above, the mini-home is considered to be a residential unit. It has the necessary residential characteristics, including permanency, as a house. It is installed in a permanent manner that is conducive to long-term residential use and is connected in a permanent way to electrical and water facilities. As such, the unit is considered to be a residential unit that is affixed to the land.
Whether a particular residential unit is used as a place of residence is a question of fact. That determination is made on a case-by-case basis. A residential unit that is affixed to the land may be considered to be a place of residence based on the purpose for which it was affixed to the land, as well as the length of time and the frequency throughout the year that the individual occupying the unit is physically present and using the unit as a place of residence.
In this case, the facts indicate that you have been using the mini-home as your place of residence throughout the period the Park is in operation, annually, from April 1st to the October 31st. As such, all of the requirements of subparagraph 7(a)(i) of Part I of Schedule V to the ETA are met.
ADDITIONAL INFORMATION
Ineligibility for a rebate
Under the ETA, where a person has paid an amount as or on account of tax that was not payable, the person may request a refund or credit of the amount from the supplier. A supplier may refund or credit the tax within two years after the day the amount was charged or collected. Further information on the time limitations and conditions for claiming refunds and credits is available in GST/HST Memoranda Series Chapter 12.2, Refund, Adjustment, or Credit of the GST/HST under Section 232 of the Excise Tax Act, available on the CRA Web site.
Where a refund or credit is not issued by the supplier, the person who has paid an amount as GST/HST on supplies that qualify as an exempt supply may make an application to the Canada Revenue Agency for a rebate of tax paid in error under section 261 using Form GST189, General Application for Rebate of GST/HST.
However, the time limit to apply for this rebate is within two years after the day the amount was paid. Since the last amount you paid to the supplier was in [mm/yyyy], you are no longer eligible for a rebate under section 261.
For additional information, see the GST/HST Guide RC4033, General Application for GST/HST Rebates.
DISCLAIMER
In accordance with the qualifications and guidelines set out in GST/HST Memorandum 1-4, Excise and GST/HST Rulings and Interpretations Service, the Canada Revenue Agency (CRA) is bound by the ruling given in this letter provided that: none of the issues discussed in the ruling are currently under audit, objection, or appeal; no future changes to the ETA, regulations or the CRA’s interpretative policy affect its validity; and all relevant facts and transactions have been fully and accurately disclosed. The interpretation(s) given in this letter, including any additional information, is not a ruling and does not bind the CRA with respect to a particular situation. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein. Future changes to the ETA, regulations, or the CRA’s interpretative policy could affect the interpretation(s) or the additional information provided herein.
CONTACT
If you require clarification with respect to any of the issues discussed in this letter, please call me directly at 514-213-6075. Should you have additional questions on the interpretation and application of the GST/HST, please contact a GST/HST Rulings officer at 1-800-959-8287.
Yours truly,
Stéphanie Blanchette
Officer
Real Property Unit 2
GST/HST Rulings Directorate
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