7 April 2022 CBA Roundtable, Q.7
Regarding whether the conversion of a rental apartment building into condo units would be subject to GST/HST in the hands of an owner under the “self-supply” rule in ETA s. 191, CRA noted:
A "residential condominium unit" as defined in subsection 123(1) of the ETA includes a residential complex that is, or is intended to be, a bounded space in a building designated or described as a separate unit on a registered condominium or strata lot plan or description. As per the definition, only intention is required for there to be a residential condominium unit.
Partly, on this basis, CRA considered that the relevant self-supply rule was that in s. 19(1) applicable to the substantial renovation (or construction) of a residential condominium unit rather than that applicable under s. 191(3) to the substantial renovation (or construction) of a multiple unit residential complex. Thus, the issue would turn on whether there was substantial renovation of the physical space for each proposed condo unit – with CRA reiterating in this regard its longstanding position that to rise to the level of substantial renovation there would need to be a gutting (or more) of each unit at issue.
|Locations of other summaries||Wordcount|
|Tax Topics - Excise Tax Act - Section 191 - Subsection 191(1)||s. 191(1) rather than s. 191(3) is relevant to conversion of MURC to condo units, and its application turns on whether there is substantial renovation on a unit-by-unit basis||485|
|Tax Topics - Excise Tax Act - Section 123 - Subsection 123(1) - Builder - Paragraph (a)||meaning of “construction” and “substantial renovation”||149|