CRA indicates that joint tenants of a newly-constructed residence are each responsible for the GST/HST on 100% of the property’s FMV

Two individuals (the “Owners”) acquired a residential property as joint tenants and contracted for a laneway house to be constructed on the property and leased out.

CRA found that since each Owner, as a joint tenant, was considered at common law to own the entire property, and given that the self-supply rule in ETA s. 191(1) applied to the whole residential complex and not to an interest therein and the rule does not provide for the division of the tax payable on the deemed supply among multiple joint-tenant builders, each co-owner was subject to tax on the FMV of the whole building. However, where one joint tenant accounted for such tax payable on the self-supply, such accounting and the remittance of any resulting positive amount of net tax by that joint tenant would discharge the liability of the other joint tenant, and only one of the Owners was required to report and remit the GST/HST deemed to have been collected on the fair market value of the newly constructed laneway house.

Neal Armstrong. Summaries of 23 March 2023 GST/HST Ruling 244917 under ETA s. 273(1) and s. 191(1).