Real Property (GST/HST) Regulations

Real Property (GST/HST) Regulations Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Real Property (GST/HST) Regulations under sections 277a and 277.1b of the Excise Tax Actc. S.C. 1993, c. 27, s. 125(1) S.C. 2009, c. 32, s. 37(1) R.S., c. E-15 Definition of Act In these Regulations, Act means the Excise Tax Act. Meaning of words and expressions Unless otherwise defined, words and expressions used in these Regulations have the same meaning as in section 256.2 of the Act. Eligible purpose For the purposes of these Regulations, a residential unit is held by a person for an eligible purpose if the residential unit is held by the person for a purpose set out in clause (a)(ii)(A) or (A.1) of the definition qualifying residential unit in subsection 256.2(1) of the Act. Excluded renovated housing supply For the purposes of these Regulations, a taxable supply is an excluded renovated housing supply of a residential complex if the residential complex is a substantially renovated residential complex and it is the case that the taxable supply is deemed to have been made and received under subsection 191(3) of the Act as a result of the substantial renovation of the residential complex and the residential complex was held or used as a residential complex immediately before the beginning of the substantial renovation; the taxable supply is a supply by way of sale of the residential complex to a person that is not a builder of the residential complex and the residential complex has not been occupied by an individual as a place of residence or lodging after the substantial renovation is substantially completed, and was held or used as a residential complex immediately before the beginning of the substantial renovation; or the taxable supply is a supply of an interest in the residential complex and the conditions in respect of the residential complex set out in subparagraphs (b)(i) and (ii) are met. Share of a corporation For the purposes of this section and for greater certainty, a share of the capital stock of a corporation includes a share of the capital stock of a cooperative corporation. Total consideration – supply of share For the purposes of this section, the total consideration for a supply to a person of a share in the capital stock of a corporation that confers a right in respect of a residential unit situated in a residential complex is the total of all amounts, each of which is the consideration payable for the supply to the person of the share or an interest in the corporation, the residential complex or the residential unit. Excluded equity housing supply For the purposes of these Regulations, a taxable supply is an excluded equity housing supply of a residential complex if the taxable supply is a supply by way of sale to a corporation of the residential complex, an interest in the residential complex or an addition to the residential complex and it is the case that, in respect of a residential unit situated in the residential complex, the corporation makes a particular supply of a share of the capital stock of the corporation to a particular person; the share confers on the particular person a right to possess the residential unit or a right to enter into an agreement for the supply by the corporation of the residential unit to the particular person by way of a lease that is, or is similar to, an arrangement commonly referred to as a “proprietary lease”; and if the particular person were to make a subsequent supply of the share to the corporation or another person, the total consideration for the subsequent supply would not be prohibited from exceeding the total consideration for the particular supply under the statute by or under which the corporation was incorporated, under the corporation’s charter, articles of association, by-laws or contracts with its shareholders or members or under contracts between its shareholders or members. Prescribed conditions For the purposes of subsection 256.2(3.1) of the Act, the following are prescribed conditions: in the case of a taxable supply described in paragraph 256.2(3.1)(a) of the Act, the taxable supply is a supply of an addition to a multiple unit residential complex, or the taxable supply is a supply of a residential complex, or an interest in a residential complex, and is not an excluded renovated housing supply of the residential complex; in the case of a taxable supply described in paragraph 256.2(3.1)(b) of the Act, the property that is converted for use as the residential complex was, on September 13, 2023, in existence, not in the process of being constructed, and not being used as a residential complex; and in any case, the taxable supply is not an excluded equity housing supply of the residential complex. Prescribed property — residential complex For the purposes of subsection 256.2(3.1) of the Act, in respect of a taxable supply received by a person that is a purchase from the supplier (within the meaning of subparagraph 256.2(3)(a)(i) of the Act) of a residential complex or an interest in a residential complex or that is a deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) of a residential complex, the residential complex or interest, as the case may be, is prescribed property if the residential complex is a multiple unit residential complex and the following conditions are met: the multiple unit residential complex includes four or more residential units and at least four of those units each contains private kitchen facilities, a private bath and a private living area, or 10 or more residential units; and all or substantially all of the residential units that form part of the multiple unit residential complex are, at the particular time referred to in paragraph 256.2(3)(b) of the Act, qualifying residential units of the person that are held by the person for an eligible purpose. Prescribed property — addition For the purposes of subsection 256.2(3.1) of the Act, in respect of a taxable supply received by a person that is a deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) of an addition to a multiple unit residential complex, the addition is prescribed property if the following conditions are met: the addition includes 10 or more residential units; all or substantially all of the residential units that form part of the addition are, at the particular time referred to in paragraph 256.2(3)(b) of the Act, qualifying residential units of the person that are held by the person for an eligible purpose; and all or substantially all of the residential units that form part of the multiple unit residential complex and the addition combined are held by the person at the particular time for an eligible purpose. Prescribed conditions – cooperative housing corporations For the purposes of subsection 256.2(2.1) of the Act, in respect of a taxable supply of property that is a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, it is a prescribed condition that the taxable supply is not an excluded equity housing supply of the residential complex. Rebates — provincial component Subject to subsections (6) and (7), if a person is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of a taxable supply of a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, if the residential complex is situated in Ontario, Nova Scotia, Prince Edward Island or Newfoundland and Labrador and if subsection 256.2(3.1) of the Act applies in respect of the taxable supply of the residential complex, interest or addition, then, for the purposes of subsection 256.21(1) of the Act, the following rules apply: section 47 of the New Harmonized Value-added Tax System Regulations, No. 2 does not apply in respect of the residential complex, interest or addition, as the case may be; and the person is a prescribed person and the amount of the rebate under subsection 256.21(1) of the Act in respect of the residential complex, interest or addition, as the case may be, is equal to the total of all amounts each of which is an amount, in respect of each residential unit that forms part of the residential complex or addition and that is a qualifying residential unit of the person at the specified time — being the time at which the tax in respect of the residential complex, interest or addition, as the case may be, first becomes payable in respect of the purchase from the supplier (within the meaning of subparagraph 256.2(3)(a)(i) of the Act) or is deemed to have been paid by the person in respect of the deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) — equal to in the case of a residential complex situated in Ontario, Nova Scotia or Newfoundland and Labrador, the amount determined by the formula is the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and is the unit’s percentage of total floor space, and in the case of a residential complex situated in Prince Edward Island, if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed before 2029, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed before 2029, the lesser of $35,000 and the amount determined by the formula is the unit’s percentage of total floor space, if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2029, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2029, the lesser of $31,500 and the amount determined by the formula is 90% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2030, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2030, the lesser of $28,000 and the amount determined by the formula is 80% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2031, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2031, the lesser of $24,500 and the amount determined by the formula is 70% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2032, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2032, the lesser of $21,000 and the amount determined by the formula is 60% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2033, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2033, the lesser of $17,500 and the amount determined by the formula is 50% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2034, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2034, the lesser of $14,000 and the amount determined by the formula is 40% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and if the conditions set out in paragraph 256.2(3.1)(a) of the Act are met in respect of the taxable supply and the construction or last substantial renovation of the residential complex or addition, as the case may be, is substantially completed in 2035, or if the conditions set out in paragraph 256.2(3.1)(b) of the Act are met in respect of the taxable supply and the construction or alteration necessary to effect the conversion is substantially completed in 2035, the lesser of $10,500 and the amount determined by the formula is 30% of the total tax under subsection 165(2) of the Act that, at the specified time, is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and is the unit’s percentage of total floor space. Rebate of provincial component — New Brunswick Subject to subsections (6) and (7), if a person is entitled to claim a rebate under subsection 256.2(3) of the Act in respect of a taxable supply of a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex, if the residential complex is situated in New Brunswick and if subsection 256.2(3.1) of the Act would apply in respect of the taxable supply of the residential complex, interest or addition if the references in paragraphs 256.2(3.1)(a) and (b) of the Act to “September 13, 2023”, “2031” and “2036” were read as references to “November 14, 2024”, “2028” and “2030”, respectively, the following rules apply for the purposes of subsection 256.21(1) of the Act: the person is a prescribed person and the amount of the rebate under subsection 256.21(1) of the Act in respect of the residential complex, interest or addition, as the case may be, is equal to the total of all amounts each of which is an amount, in respect of each residential unit that forms part of the residential complex or addition and that is a qualifying residential unit of the person at the specified time — being the time at which the tax in respect of the residential complex, interest or addition, as the case may be, first becomes payable in respect of the purchase from the supplier (within the meaning of subparagraph 256.2(3)(a)(i) of the Act) or is deemed to have been paid by the person in respect of the deemed purchase (within the meaning of subparagraph 256.2(3)(a)(ii) of the Act) — equal to the amount determined by the formula Application for rebate For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under subsection (1) or (1.1), must be filed within two years after the end of the month in which tax first becomes payable by the person, or is deemed to have been paid by the person, in respect of the residential complex, interest or addition, as the case may be. Prescribed circumstances The following circumstances are prescribed for the purposes of subsection 256.21(1) of the Act in respect of any rebate, the amount of which is determined under this section, to a person: if the rebate is in respect of a taxable supply received by the person from another person, the person has paid all of the tax payable in respect of that supply; if the rebate is in respect of a taxable supply in respect of which the person is deemed to have collected tax in a reporting period of the person, the person has reported the tax in the person’s return under Division V of Part IX of the Act for the reporting period and has remitted all net tax remittable, if any, as reported in that return; no amount of tax included in determining the rebate would otherwise be included in determining a rebate of the person under section 256.1 of the Act or in determining a rebate of the person under section 256.21 of the Act, the amount of which is determined under any of sections 41, 43, 45 and 46 of the New Harmonized Value-added Tax System Regulations, No. 2; and no amount of tax that would otherwise be included in determining the rebate is included in determining a rebate of the person under section 259 of the Act. Application of subsection 256.2(9) of Act If, in the absence of this subsection, a rebate under subsection 256.21(1) of the Act in respect of real property would not be payable to a person only because all or part of the tax included in determining the amount of a particular rebate in respect of the real property under section 256.2 of the Act would otherwise be included in determining the amount of a rebate of the person under section 259 of the Act, for the purpose of applying this section in respect of the real property, the person is deemed to be entitled to claim the particular rebate. Restriction If a person is entitled to include an amount of tax in determining, under this section, the amount of a particular rebate payable under subsection 256.21(1) of the Act in respect of real property and the person includes all or part of the amount of tax in determining the amount of a rebate of the person under section 259 of the Act that is claimed by the person at any time, for the purpose of applying section 256.21 of the Act in respect of the real property, the person is deemed to have never been entitled to include the amount of tax in determining the amount of the particular rebate. Special rules For the purposes of this section, subsection 256.2(8) of the Act applies with any necessary modifications. Restrictions In determining under this section the amount of a rebate payable to a person under subsection 256.21(1) of the Act, there shall not be included any amount of tax that the person is, under an Act of Parliament (other than the Act) or any other law, not required to pay or remit; or entitled to recover by way of a rebate, refund or remission. [Amendments] September 14, 2023 Subject to subsections (2) and (3), these Regulations are deemed to have come into force on September 14, 2023. Subsections 6(1) to (3) apply in respect of a taxable supply by way of sale of a residential complex or an interest in a residential complex to a person that is not a builder of the residential complex, or of a residential complex or an addition to a residential complex to a person that is, otherwise than by reason of subsection 190(1) of the Act, a builder of the residential complex or addition, as the case may be, if the construction or last substantial renovation of the residential complex or addition, as the case may be, begins after September 13, 2023; and a taxable supply by way of sale of a residential complex that is deemed to be made to a person that has converted real property for use as the residential complex and is, as a result, deemed under subsection 190(1) of the Act to be a builder of the residential complex if the construction or alteration necessary to effect the conversion begins after September 13, 2023. Subsection 6(4) applies in respect of an exempt supply made after September 13, 2023.