Excise Tax Act (R.S.C., 1985, c. E-15)

Marginal note:Non-substantial renovation

192. For the purposes of this Part, where in the course of a business of making supplies of real property a person renovates or alters a residential complex of the person and the renovation or alteration is not a substantial renovation, the person shall be deemed

• (a) to have made and received a taxable supply, in the province in which the complex is situated and at the earlier of the time the renovation is substantially completed and the time ownership of the complex is transferred, for consideration equal to the total of all amounts each of which is an amount in respect of the renovation or alteration (other than an amount of consideration paid or payable by the person for a financial service or for any property or service in respect of which the person is required to pay tax) that would be included in determining the adjusted cost base to the person of the complex for the purposes of the Income Tax Act if the complex were capital property of the person and the person were a taxpayer under that Act; and

• (b) to have paid as a recipient and to have collected as a supplier, at that time, tax in respect of the supply, calculated on the total determined under paragraph (a).

Marginal note:Sale of real property

• 193. (1) Subject to subsection (2.1), if at a particular time a registrant makes a particular taxable supply of real property by way of sale, other than

  • (a) a supply deemed under subsection 206(5) or 207(2) to have been made, or

  • (b) a supply made by a public sector body (other than a financial institution) of property in respect of which an election by the body under section 211 is not in effect at the particular time,

  the registrant may, notwithstanding section 170 and Subdivision d, claim an input tax credit for the reporting period in which tax in respect of the particular taxable supply becomes payable or is deemed to have been collected, as the case may be, equal to the amount determined by the formula

  A × B

  where

  A 

  is the lesser of

  • (a) the basic tax content of the property at the particular time; and

  • (b) the tax that is or would, in the absence of section 167 or 167.11, be payable in respect of the particular taxable supply, and

  B 

  is the percentage that, immediately before the particular time, the use of the property otherwise than in commercial activities of the registrant was of the total use of the property.

• Marginal note:Sale by public sector bodies

  (2) Subject to subsection (2.1), if at a particular time a registrant that is a public sector body (other than a financial institution) makes a particular taxable supply of real property by way of sale (other than a supply that is deemed under subsection 200(2) or 206(5) to have been made) and, immediately before the time tax becomes payable in respect of the particular taxable supply, the property was not used by the registrant primarily in commercial activities of the registrant, except where subsection (1) applies, the registrant may, despite section 170 and Subdivision d, claim an input tax credit for the reporting period in which tax in respect of the particular taxable supply became payable or is deemed to have been collected, as the case may be, equal to the lesser of

  • (a) the basic tax content of the property at the particular time; and

  • (b) the tax that is or would, but for section 167, be payable in respect of the particular taxable supply.

• Marginal note:Limitation

  (2.1) If the particular taxable supply of property referred to in subsection (1) or (2) is made at a particular time by a public sector body to another person with whom the public sector body is not dealing at arm’s length, the value of A in subsection (1) and the input tax credit under subsection (2) shall not exceed the lesser of

  • (a) the basic tax content of the property at the particular time, and

  • (b) the amount determined by the formula

    (A/B) × C

    where

    A 

    is the basic tax content of the property at the particular time,

    B 

    is the amount that would be the basic tax content of the property at that time if that amount were determined without reference to the description of B in paragraph (a) and the description of K in paragraph (b) of the definition “basic tax content” in subsection 123(1), and

    C 

    is the tax that is or would, in the absence of section 167, be payable in respect of the particular taxable supply.

• Marginal note:Redemption of real property

  (3) Where

  • (a) for the purposes of satisfying in whole or in part a debt or obligation owing by a person (in this subsection referred to as the “debtor”), a creditor exercises a right under an Act of Parliament or the legislature of a province or an agreement relating to a debt security to cause the supply of real property, and

  • (b) under the Act or the agreement, the debtor has a right to redeem the property,

  the following rules apply:

  • (c) the debtor is not entitled to claim an input tax credit under this section in respect of the property unless the time limit for redeeming the property has expired and the debtor has not redeemed the property, and

  • (d) where the debtor is entitled to claim the input tax credit, that input tax credit is for the reporting period in which the time limit for redeeming the property expires.