Real property

Most sales, leases, or other supplies of real property by charities are exempt from GST/HST. However, the following supplies are excluded from the general exemption and GST/HST applies:

• the sale of a new or substantially (i.e., 90% or more) renovated residential complex;
• the sale of a used residential complex if you are a builder who claimed input tax credits on your last purchase of, or on an improvement to, the complex;
• the deemed sale of a new or substantially renovated residential complex if you are a builder;
• most deemed supplies of real property. For example, when you change the primary use of the property from commercial use to other purposes, see From commercial to non-commercial use;
• the sale of land to an individual or a personal trust, unless there is a structure on it that you used as an office or in commercial activities or in making exempt supplies;
• the sale of real property that, immediately before the time of the sale, you used primarily in your commercial activities;
• the supplies of designated municipal property if you are a designated municipality for the purposes of claiming public service bodies' rebates; and
• real property that you choose to treat as taxable by filing an election with us.

Even if you are registered for GST/HST, you cannot claim input tax credits (ITCs) for GST/HST you paid or owe on purchases of real property, on purchases of improvements to real property, or on other ongoing expenses related to real property that you supply to others, where the property is used primarily in making exempt supplies.

Also see Special self-supply rules for builders who receive government funding.

Election for real property

As a charity, you can choose to file an election on a property by property basis, that allows you to treat certain exempt sales and leases of real property as taxable supplies. This election allows you to claim ITCs for GST/HST you paid or owe on the acquisition of the property, or any improvements to it, to the extent that the property is used to make taxable supplies (as long as it is used at least 10% to make taxable supplies). This election applies to the following real property:

• capital real property;
• real property held in inventory for the purpose of supplying it; and
• real property acquired by way of lease, licence or similar arrangement, for the purpose of making a resupply of the property by way of lease, licence or similar arrangement or for the purpose of assigning the arrangement.

To make this election, you have to complete and send us Form GST26, Election or Revocation of an Election by a Public Service Body to Have an Exempt Supply of Real Property Treated as a Taxable Supply.

You can elect when you acquire the real property, or in later reporting periods.

Forms and publications

• Guide RC4022, General Information for GST/HST Registrants
• Guide RC4082, GST/HST Information for Charities

Date modified:

2014-09-18