Subsection 191(1) - Self-Supply of Single Unit Residential Complex or Residential Condominium Unit
Cases
Carvest Properties Limited v. Canada, 2022 FCA 124
The company (“Carvest”) constructed a 137-unit building in London, Ontario, for purposes of renting the units. Nonetheless, it registered each...
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| Tax Topics - General Concepts - Fair Market Value - Land | the relevant valuation unit in an apartment building for ETA s. 191(1) self-assessment purposes was each rental unit | 249 |
See Also
Carvest Properties Limited v. The Queen, 2021 TCC 21, aff'd 2022 FCA 124
The appellant (“Carvest”), which was in the business of developing, owning and renting out apartment buildings in southern Ontario, had...
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| Tax Topics - General Concepts - Estoppel | CRA not estopped from applying a different valuation method from that used in previous audits | 268 |
| Tax Topics - General Concepts - Fair Market Value - Land | rental apartment building units that were registered as condo units for municipal tax purposes were to be valued based on comparable condo sales | 220 |
Daruwala v. The Queen, 2012 TCC 257 (Informal Procedure)
Woods J. determined that a newly-constructed home acquired by the appellants from the corporate vendor ("TRG") had already been subject to the...
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| Tax Topics - Income Tax Act - Section 2 - Subsection 2(1) | 156 |
Administrative Policy
23 March 2023 GST/HST Ruling 244917 - GST/HST implications of constructing a laneway house
Two individuals (the “Owners”) acquired a residential property as joint tenants and entered into an Agreement with third parties (the...
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| Tax Topics - Excise Tax Act - Section 273 - Subsection 273(1) | development and property management agreement did not give rise to a JV | 116 |
| Tax Topics - Excise Tax Act - Section 222 - Subsection 222(1) | deemed trust applied to each joint tenant regarding the full amount of self-supply tax under s. 191(1) on the whole property | 259 |
| Tax Topics - General Concepts - Ownership | each joint tenant owns the entire property | 105 |
7 April 2022 CBA Roundtable, Q.7
The definition of “builder” in s. 123(1) includes a person who carries on the “construction” of a “residential complex,” which is...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Residential Condominium Unit | residential condominium unit constituted once there is an intention to have a particular bounded space become a condominium unit | 199 |
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder - Paragraph (a) | meaning of “construction” and “substantial renovation” | 149 |
Excise and GST/HST News – No. 91 under "Head leases and subleases of new residential property: who must self-supply and who may be entitled to a rebate?" May 2014
If a person purchases newly constructed or substantially renovated housing for the purpose of leasing or licensing it to an individual as a place...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder | purchase of new housing by head lessor | 292 |
4 July 2013 Interpretation Case No. 144290
The City leases land to the Developer (with a right to sever and remove improvements on the termination of the lease), and the Developer enters...
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| Tax Topics - Excise Tax Act - Section 254.1 - Paragraph 254.1(2)(d) | supply of new townhouse on ground lease | 308 |
| Tax Topics - Excise Tax Act - Section 256 - Subsection 256(2) | supply of new townhouse on ground lease | 86 |
GST/HST Memorandum 19.2.3 “Residential Real Property - Deemed Supplies” June 1998
Purpose of self-supply rules: level playing field
5. The self-supply rules.. apply only to "builders" and their purpose is to remove the potential...
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| Tax Topics - Excise Tax Act - Section 191 - Subsection 191(9) | 130 |
Government Funding
Cases
High-Crest Enterprises Limited v. Canada, 2017 FCA 88
Owen J had found below that although government assistance for an addition to a Nova Scotia nursing home of the appellant took the form of the...
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| Tax Topics - Other Legislation/Constitution - Federal - Tax Court of Canada Act - Section 14 - Subsection 14(2) | CJ had no power to reassign case after trial to 2nd judge | 270 |
Paragraph 191(1)(b)
Cases
Canada v. Polygon Southampton Development Ltd., 2003 FCA 193
The appellant (“Polygon”) developed condos on land leased from the City of Vancouver under a 99-year lease. It treated the constructed condos...
Subsection 191(3) - Self-Supply of Multiple Unit Residential Complex
Cases
North Shore Health Region v. Canada, 2008 FCA 2
The self-supply rule did not apply to a newly-constructed nursing home when the first residents were given occupancy of their rooms given that the...
See Also
9158-9853 Québec Inc. v. Agence du revenu du Québec, 2022 QCCQ 9851
The appellant (“9158”), which had constructed a 14-storey apartment building, with two floors of commercial space and with underground...
Beaudet v. The Queen, 2014 TCC 52
The appellant ("Beaudet") was a partnership engaged in the construction of four adjoining apartment building, which it then rented out, resulting...
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| Tax Topics - General Concepts - Fair Market Value - Land | FMV of newly-constructed building equal to direct and indirect costs | 174 |
Desjardins v. The Queen, 2010 TCC 521 (Informal Procedure)
The appellant built a 180-unit apartment building in in Sainte-Thérèse and did not report GST on the resulting self-supply when the first unit...
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| Tax Topics - General Concepts - Fair Market Value - Land | new apartment building valued at cost rathr than lower valuation based on cap rate | 194 |
Grafton Developments Inc. v. The Queen, 2006 TCC 356
A predecessor by amalgamation of the appellant purchased a 40-year old nine-storey commercial property in Halifax on December 1, 1997 for a...
Kimm Holdings Ltd. v. The Queen, 2006 TCC 152 (Informal Procedure)
The appellant constructed a 104-unit apartment building in Calgary. It claimed input tax credits but did not self-assess on substantial...
Bergeron v. The Queen, docket 2002-199(GST)I (Informal Procedure)
Before confirming the application of the self-supply rule to three small apartment buildings constructed by the appellant based (in the case of...
Le 11675 Societe en Commandite v. The Queen, docket 2000-4081(GST)G
The appellant constructed a six-storey building in Saint‑Georges, Beauce, Quebec. Its ground floor was occupied by a department store. The...
Déziel v. The Queen, [2003] GSTC 88, varied on other grounds 2004 FCA 116
From 1993 to 1996, the appellant built 10 complexes containing 108 units in Trois-Rivières, and was assessed for failure to have self-assessed on...
Sira Enterprises Ltd. v. The Queen, docket 98-2463-GST-G
Margeson TCJ accepted that newly-constructed apratment buildings built b the registratn should be valued on the basis of the “cost approach”...
Timber Lodge Ltd. v. The Queen, [1994] GSTC 73 (TCC)
Both sides’ experts relied almost exclusively on the income and comparison methods in valuing newly-constructed residential apartment buildings...
Administrative Policy
7 April 2022 CBA Roundtable, Q.3
CRA was described as denying builders of purpose-built residential rental housing ITCs for GST/HST paid on appliances (fridge, stove, dishwasher...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Real Property | two annexation tests for determining whether personal property has become a fixture | 285 |
22 March 2022 GST/HST Interpretation 238955 - Whether a bunkhouse located on […][a farm] and used to provide housing to temporary foreign workers is a place of residence for GST/HST purposes and eligibility for input tax credits in respect of its construction
A farmer constructed a 600 square-feet bunkhouse (with 2 bedrooms, a kitchen and bathroom) to provide accommodation to two temporary foreign...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Residential Complex | a bunkhouse was a residential complex even though it was used for lodging rather than as a place of residence | 93 |
| Tax Topics - Excise Tax Act - Section 141 - Subsection 141(4) | s. 141(4) applied where commercial use of bunkhouse was “minimal” | 168 |
25 March 2021 CBA Commodity Taxes Roundtable, Q.2
At a prior Roundtable, CRA indicated that on receipt of a builder's objection to a reassessment under s. 191(3), where the issue is the FMV of the...
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| Tax Topics - General Concepts - Fair Market Value - Land | CRA will assign a second appraiser on an appraisal appeal, who reviews the original appraisal | 102 |
27 February 2020 CBA Roundtable, Q.15
The definition of “fair market value” in s. 123(1) excludes those taxes that are excluded by s. 154 from the value of consideration paid for a...
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| Tax Topics - General Concepts - Fair Market Value - Land | sales of used apartment buildings used as comparables for cap rate purposes may reflect embedded GST/HST | 135 |
27 February 2020 CBA Roundtable, Q.8
Where a person is the operator of a joint venture for the construction of a multiple-unit residential complex by virtue of having managerial or...
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| Tax Topics - Excise Tax Act - Section 273 - Subsection 273(1) | a construction manager for an apartment building JV cannot be the JV operator (as no deemed commercial activity under s. 191(3) | 175 |
May 2019 CPA Alberta CRA Roundtable, GST Session – Q.8
Where a builder was invoiced, after the time that it self-assessed for the fair market value of a newly-constructed multiple unit residential...
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| Tax Topics - Excise Tax Act - Section 133 | s. 133 determines time of acquisition for ITC purposes | 209 |
| Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) | ITCs can be claimed by builder after s. 191(3) self-assessment date for work done before but not after that date | 326 |
| Tax Topics - Excise Tax Act - Section 141.01 - Subsection 141.01(2) | purpose of acquisition is assessed at time agreement is entered into | 214 |
17 May 2017 Interpretation 174642
Holdco is a privately-held corporate registrant that has contracted with an arm’s length person to develop a project on its land an apartment...
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| Tax Topics - Excise Tax Act - Section 169 - Subsection 169(1) | ultimate exempt use did not deny ITCs | 205 |
| Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 6.11 | headlease of MURC not exempt where used by lessee more than 10% in short-term rentals | 128 |
| Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 5 | claiming of ITC generated subsequent taxable sale | 154 |
GST/HST Notice 224 under "Issue no. 3 – "Factors for determining whether possession is given." September 2007
If the facts of a particular case indicate that an individual is not given possession of a room or suite in the facility, then section 191 of the...
4 April 2005 Ruling Document No. 52246
Ruling that a subsidized seniors' apartment was substantially renovated, so that s. 191(3) deemed the builder to make a taxable supply of the...
GST/HST Policy Statement P-165R Fair Market Value for Purposes of Part IX of the Excise Tax Act (Revised) March 1998
Cost method can be used in determining FMV under self-supply
Briefly, there are three general methods or approaches to market valuation that are...
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| Tax Topics - General Concepts - Fair Market Value - Land | 77 |
Articles
PWC, "Tax Insights: Canada Revenue Agency confirms that fair market value of newly constructed residential complexes includes GST/HST", Issue 2024-10, 22 March 2024
CRA states that GST/HST should be backed out of the appraised value of newly constructed residence for GST/HST self-assessment purposes
A recently...
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| Tax Topics - General Concepts - Fair Market Value - Land | FMV of newly-constructed residence should have the GST/HST backed out | 86 |
Subsection 191(4)
Administrative Policy
7 April 2022 CBA Roundtable, Q.8
A person other than an individual with an interest in a multiple unit residential complex (“MURC”) physically reconfigures the space within...
Subsection 191(5)
Cases
Wall v. Canada, 2021 FCA 132
The taxpayer purchased three homes in Vancouver in succession between 2004 and 2009, demolished each one, constructed a new house and sold it less...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder - Paragraph (f) | 3 successive demolish, build and sell transactions in new homes over 5 years were not excluded under (f) | 258 |
| Tax Topics - Excise Tax Act - Schedules - Schedule V - Part I - Section 3 | residential use by the builder not established | 267 |
| Tax Topics - Income Tax Act - Section 9 - Capital Gain vs. Profit - Real Estate | three successive sales of newly-constructed homes over a period of under 5 years were made in the course of a business or adventures | 223 |
See Also
Swift v. The Queen, 2020 TCC 115
Over a 23-year period, an individual, who through a wholly-owned company (“TSC”) carried on a small construction business, bought and sold...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder - Paragraph (f) | home was constructed for personal use rather than as an adventure | 310 |
| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Business | “business” likely does not include an adventure | 176 |
Coates v. The Queen, 2011 TCC 74 (Informal Procedure)
The appellant built three houses in New Brunswick, moved into them and sold them in the years 2000 to 2006, and also built the home that he...
Administrative Policy
25 March 2021 CBA Commodity Taxes Roundtable, Q.12
An individual (A) purchased a property in trust with other individuals including her husband (B), for development as a condominium complex. On...
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| Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Residential Complex | uncertainties as to whether two condos functionally used as one residence are a single residence | 180 |
Subsection 191(9)
Administrative Policy
GST/HST Memorandum 19.2.3 “Residential Real Property - Deemed Supplies” June 1998
Time of "substantial completion"
11. Generally, substantial completion occurs before occupancy is given to the first individual. For GST/HST...
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| Tax Topics - Excise Tax Act - Section 191 - Subsection 191(1) | 225 |
23 February 1998 Interpretation HQR0000488
In the course of a general discussion, CRA stated:
In the case of substantially completed multiple unit residential complex, the builder is...