Words and Phrases - "substantial completion"
Underused Housing Tax Notice UHTN13 Exemptions for New Residential Properties February 2023
Application of GST/HST guidelines on meaning of “substantial completion”
What is substantial completion
… The … CRA … has guidelines and criteria under the goods and services tax/harmonized sales tax (GST/HST) to determine when construction is substantially completed. Similar guidelines and criteria may be used for the underused housing tax.
Generally, substantial completion of a residential property means that construction is at a stage of completion (generally 90% or more) that allows an individual to reasonably inhabit the property. A residential property is considered to be substantially completed even if there are outstanding minor repairs, adjustments or upgrades, since this will not reasonably impair the use and enjoyment of the property as a place of residence.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Other Legislation/Constitution - Federal - Underused Housing Tax Act - Section 6 - Subsection 6(7) - Paragraph 6(7)(l) | 87 |
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 purposes, "substantial completion" means that the construction or substantial renovation of the complex is at a stage of completion (generally, 90% or more) so that an individual is able to reasonably inhabit the premises. Minor repairs, adjustments or upgrades that are still outstanding do not reasonably impair the use and enjoyment of the housing unit as a place of residence. If possession is given before substantial completion, the tax liability does not arise from self-supply until the time of substantial completion. In any case, substantial completion is deemed to occur no later than the time when 90% of the units in the complex are occupied.
| Locations of other summaries | Wordcount | |
|---|---|---|
| Tax Topics - Excise Tax Act - Section 191 - Subsection 191(1) | 225 |
Lim v. The Queen, docket 98-1202-IT-G (TCC)
The appellant had demolished the fundamental assumption of the Minister that substantial completion occurred in April 1995 by advancing evidence that he had installed tiles in parts of the house, completed installation of some of the hardwood floor, installed light fixtures, installed moulding on the cabinet and installed shower stalls after that date. As the onus had shifted to the Minister to put forward evidence of another date that was still outside the two-year limit referred to in s. 256(3), and this had not been done, the appeal was allowed. Bowman T.C.J. also stated:
"I have concluded that the construction was not substantially completed until the railing on the stairs and balcony was installed. The appellant could not have obtained a certificate of occupancy before they were completed and they clearly were necessary for the safety of the house."
Bowman T.C.J. also indicated that the application of fixed percentages was not an appropriate method for determining substantial completion.