Words and Phrases - "land"
Toronto (City) v Municipal Property Assessment Corporation Region 09, 2010 CanLII 151281 (ON ARB)
The appellants take the position that the surface portion of their lands in the City of Toronto, which were used for surface parking and the placement of advertising signs, were to be properly classified for purposes of the Assessment Act (Ontario) in the Commercial Property Class and that the “air rights” above the parking lot surfaces were properly classified in the Commercial Property Class, Vacant Land Subclass – whereas the position of the Municipal Property Assessment Corporation (“MPAC”) was that the density potential or development potential defined by the City zoning by-laws and referred to as “air rights” by the appellants was not land but rather, a restriction attached to the land, so that all of the land was being used for the purposes of surface parking and advertising signs and that the properties were properly classified wholly in the Commercial Property Class.
The Board first recognized the common law position (also referred to in the Cadillac Fairview decision, which it referred to) that:
Ownership of land confers rights in the air space above the lands and in the subsurface below the land. …
[T]he subject properties’ undeveloped air space is part of the land/real estate/real property. The use of the air space is restricted by the zoning by-law.
In nonetheless confirming the MPAC position, the Board stated:
The Board finds that neither the undeveloped air space above the subject properties or the rights to use the undeveloped air space are land within the meaning of the Act. Since they are not land, they cannot be a “portion of a parcel of land” eligible for a subclass. …
The air spaces above the subject properties have not been severed and alienated separately by a strata plan. They are not capable of standing on their own as land. …
The evidence is that the transfers of density rights are dealt with by agreements between parties and not by transfers of land under the Land Titles Act or Registry Act. …
There is no doubt that the density rights to a property have a value and that this value must be considered in determining the current value of the properties. If the subject properties transferred some of their density rights to another parcel of land, the evidence is that the properties losing density would have a lower current value and the property receiving the rights would have a higher current value. The description of the properties for assessment purposes would not change for the air space above the land which has not been severed as an integral portion of the property.
7 October 2016 APFF Financial Strategies and Instruments Roundtable Q. 4, 2016-0651791C6 F - Choix 45(2) et (3) - immeuble à logements
Before indicating that, if a duplex property is used more than 50% for rental use, so that it is not personal-use property, a capital loss realized on a sale of the property and relating to all of the non-depreciable component can be recognized (subject to s. 13(21.1)) as a capital loss notwithstanding its partial personal use, CRA stated:
[A] building and the land on which the building is located are a single property under the private law applicable in Québec.
[Reg.] 1102(2)… constitutes an exception to this rule in the tax context, but only for the purposes of certain provisions of the Income Tax Act. Indeed, subsection 1102(2) I.T.R. provides that the classes of property described in Schedule II shall be deemed not to include the land upon which a property described therein was constructed or is situated. Subject to subsection 13(21.1) of the Act, this provision, however, applies only for the purposes of calculating capital cost allowance, and recapture or terminal loss.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 45 - Subsection 45(3) | invalidity of s. 45(3) elections on duplex units applied only for changes of use after February 21, 2012 | 185 |
| Tax Topics - Income Tax Act - Section 54 - Personal-Use Property | land underlying duplex used 40% personally is not personal-use property | 233 |
| Tax Topics - Income Tax Act - Section 40 - Subsection 40(2) - Paragraph 40(2)(g) - Subparagraph 40(2)(g)(iii) | capital loss recognition on land underlying duplex used 40% personally | 78 |
22 June 2020 External T.I. 2017-0728051E5 F - Land inventory
Does "land" in s. 70(5.2) include not only vacant land but also land on which other real property is erected, such as houses for sale or condo units? CRA responded:
The Act does not define "land" except for the purposes of subsection 18(2), where subsection 18(3) defines "land" to specifically exclude buildings and other structures … .
For the purposes of the Act, in the absence of a provision similar to the definition in subsection 18(3), a building or other structure affixed to land would generally be considered as part of the land.
Thus … for the purposes of subsection 70(5.2) … "land" includes not only vacant land, but also land on which other real property such as houses or condos are erected.
Sun Life Assurance Co. of Canada v. R., 97 DTC 422, [1997] 3 C.T.C. 2593 (TCC)
Bowman TCJ. followed his earlier decision in Cadillac Fairview in finding that density rights purchased by the taxpayer from a nearby church were an addition to the cost of land rather than building notwithstanding accounting evidence that such expenditures should have been added to the cost of the building and notwithstanding that, unlike the other case, a building actually was constructed, stating (at p. 428):
Density rights...exist independently of their exercise and independently of any present or future building.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) | 67 |
Cadillac Fairview Corp. Ltd. v. The Queen, 97 DTC 405, [1996] 2 CTC 2197 (TCC)
The taxpayer expended $11.2 million in obtaining zoning changes that were desirable for the proposed Phase II of the Eaton Centre (i.e., eliminating a requirement that the development have a residential component, and obtaining a "transfer" of density rights from four City of Toronto sites and a Church) represented a cost of modifying restrictions of the rights that the taxpayer, as land owner, was subject to with respect to the use of the land.
Bowman J stated (at pp. 413-414):
[T]he right to use property, whether restricted by zoning by-laws or not, is a right that inheres in the ownership of the property. … The cost of a modification of the restrictions of the rights that a landowner has with respect to the use of land is a part of the cost of the land. …Density rights have to do with what the owner can do with the land. …
It requires something of a leap of faith to claim capital cost allowance under Class 3 on a building that does not exist and may never exist.
Accordingly, such expenditures were an addition to the cost to the taxpayer of the land, rather than being a cost of the proposed building expansion.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Regulations - Schedules - Schedule II - Class 1 - Paragraph 1(q) | obtaining density for building expansion was land cost rather than Class 3 cost | 100 |
Sun Life Assurance Co. of Canada v. R., 97 DTC 422, [1997] 3 C.T.C. 2593 (TCC)
Bowman TCJ. followed his earlier decision in Cadillac Fairview Corp. Ltd. in finding that density rights purchased by the taxpayer from a nearby church were an addition to the cost of land rather than building notwithstanding accounting evidence that such expenditures should have been added to the cost of the building and notwithstanding that, unlike the other case, a building actually was constructed.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Income Tax Act - Section 13 - Subsection 13(21) - Undepreciated Capital Cost - A | density rights are land even if building constructed | 87 |
Re Trizec (1986), 28 DLR (4th) 161 (Man. C.A.)
"Land is not, in law, the soil we touch, but the rights attached to it. Such rights include the right to work the soil, to mine beneath the surface and build in the air space above it: the incorporeal rights to light, support and the use of water flowing across land." The appellant was liable for municipal assessment in respect of air rights which it occupied.