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Budget 2025 Implementation Act, No. 1 (S.C. 2026, c. 3)

Assented to 2026-03-26

PART 3Amendments to the Excise Tax Act (GST/HST), the Underused Housing Tax Act, the Select Luxury Items Tax Act and Other Related Texts (continued)

DIVISION 1GST/HST Measures (continued)

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

  • 162 (1) The portion of the definition practitioner in section 1 of Part II of Schedule V to the Act before paragraph (b) is replaced by the following:

    practitioner, in respect of a supply of optometric, chiropractic, physiotherapy, chiropodic, podiatric, audiological, speech-language pathology, occupational therapy, psychological, psychotherapy, counselling therapy, midwifery, dietetic, acupuncture or naturopathic services, means a person who

    • (a) practises the profession of optometry, chiropractic, physiotherapy, chiropody, podiatry, audiology, speech-language pathology, occupational therapy, psychology, psychotherapy, counselling therapy, midwifery, dietetics, acupuncture or naturopathy as a naturopathic doctor, as the case may be,

  • (2) Subsection (1) is deemed to have come into force on November 5, 2025.

  • 163 (1) Paragraph 7(f) of Part II of Schedule V to the Act is repealed.

  • (2) Subsection (1) applies to supplies made after June 5, 2025, except that it does not apply to a supply of osteopathic services made after June 5, 2025 but before November 5, 2025 if the supplier did not charge, collect or remit any amount as or on account of tax under Part IX of the Act in respect of the supply.

SOR/2024-157Real Property (GST/HST) Regulations

  • 164 (1) The Real Property (GST/HST) Regulations are amended by adding the following after section 3:

    Marginal note:Share of a corporation

    • 3.1 (1) 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.

    • Marginal note:Total consideration – supply of share

      (2) 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.

    • Marginal note:Excluded equity housing supply

      (3) 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,

      • (a) the corporation makes a particular supply of a share of the capital stock of the corporation to a particular person;

      • (b) 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

      • (c) 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.

  • (2) Subsection (1) is deemed to have come into force on September 14, 2023.

  • 165 (1) Subsection 4(1) of the Regulations is amended by striking out “and” at the end of paragraph (a), by adding “and” at the end of paragraph (b) and by adding the following after paragraph (b):

    • (c) in any case, the taxable supply is not an excluded equity housing supply of the residential complex.

  • (2) Subsection (1) is deemed to have come into force on September 14, 2023.

  • 166 (1) The Regulations are amended by adding the following after section 4:

    Marginal note:Prescribed conditions – cooperative housing corporations

    4.1 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.

  • (2) Subsection (1) is deemed to have come into force on September 14, 2023.

DIVISION 2Underused Housing Tax Measures

2022, c. 5, s. 10Underused Housing Tax Act

Amendments to the Act

167 The Underused Housing Tax Act is amended by adding the following after section 1:

Non-application

Marginal note:Tax not payable

1.1 No tax is payable under subsection 6(3) by a person in respect of a residential property for 2025 and subsequent calendar years.

168 The Act is amended by adding the following before section 7:

Marginal note:Return not required

6.1 Despite sections 7 and 10, a person is not required to file a return for a residential property for 2025 and subsequent calendar years.

Repeals

Marginal note:Repeal

  • 169 (1) The Underused Housing Tax Act, section 10 of chapter 5 of the Statutes of Canada, 2022, is repealed.

  • (2) Subsection (1) comes into force on January 1, 2035.

Marginal note:Repeal

DIVISION 3Select Luxury Items Tax Measures

2022, c. 10, s. 135Select Luxury Items Tax Act

  • 171 (1) The Select Luxury Items Tax Act is amended by adding the following after section 1:

    Non-application

    Marginal note:Tax not payable – aircraft and vessels

    1.1 Despite anything in this Act, tax under Division 2 of Part 1 in respect of a subject aircraft or subject vessel is not payable if, in the absence of this section, the tax would become payable under that Division after November 4, 2025.

  • (2) Subsection (1) is deemed to have come into force on November 5, 2025.

  • 172 (1) Subsection 50(6) of the Act is replaced by the following:

    • Marginal note:Registration not required

      (6) Despite subsection (3), a person is not required to be registered for the purposes of this Act as a vendor in respect of

      • (a) subject aircraft or subject vessels after November 4, 2025; or

      • (b) a type of subject item if the person is a prescribed person.

  • (2) Subsection (1) is deemed to have come into force on November 5, 2025.

  • 173 (1) The Act is amended by adding the following after section 52:

    Marginal note:Registrations cancelled – aircraft and vessels

    52.1 Every registration under this Division in respect of subject aircraft or subject vessels is cancelled on February 1, 2028.

  • (2) Subsection (1) is deemed to have come into force on November 5, 2025.

  • 174 (1) Section 55 of the Act is amended by adding the following after subsection (3):

    • Marginal note:No requirement to file – aircraft and vessels

      (3.1) Despite subsection (1), a return for a reporting period of a person that begins after December 2025 is not required to be filed if

      • (a) the person is registered under this Division as a vendor in respect of subject aircraft or subject vessels;

      • (b) the person is neither registered nor required to be registered under this Division as a vendor in respect of subject vehicles; and

      • (c) no tax becomes payable by the person during the reporting period.

  • (2) Subsection 55(3.1) of the Act, as enacted by subsection (1), is repealed.

  • (3) Subsection (1) is deemed to have come into force on November 5, 2025.

  • (4) Subsection (2) comes into force on February 1, 2028.

Select Luxury Items Tax Regulations

Making of Regulations

Marginal note:Making

175 The Select Luxury Items Tax Regulations are made as follows:

Select Luxury Items Tax Regulations

Definition

Marginal note:Definition of Act

1 In these Regulations, Act means the Select Luxury Items Tax Act.

PART 1Prescribed Aircraft and Vessels

Marginal note:Exclusion from subject aircraft – agreements before 2022

2 For the purposes of paragraph (g) of the definition subject aircraft in subsection 2(1) of the Act, an aircraft is a prescribed aircraft if ownership of the aircraft is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and

  • (a) it is the case that

    • (i) the purchaser entered into the sale agreement before 2022, or

    • (ii) the purchaser

      • (A) entered into the sale agreement after 2021, and

      • (B) entered into another agreement in writing before 2022 with the vendor in respect of the aircraft, under which the purchaser

        • (I) paid a deposit in respect of the aircraft to the vendor before 2022,

        • (II) agrees to enter into the sale agreement, and

        • (III) agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement;

  • (b) the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering aircraft for sale;

  • (c) the aircraft is delivered or made available in Canada in relation to the sale agreement;

  • (d) possession of the aircraft is transferred to the purchaser under the sale agreement at a particular time;

  • (e) the vendor is a registered vendor in respect of subject aircraft at the particular time; and

  • (f) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

Marginal note:Exclusion from subject vessel – agreements before 2022

3 For the purposes of paragraph (h) of the definition subject vessel in subsection 2(1) of the Act, a vessel is a prescribed vessel if ownership of the vessel is transferred to a purchaser from a vendor by way of sale under an agreement in writing (in this section referred to as the “sale agreement”) and

  • (a) it is the case that

    • (i) the purchaser entered into the sale agreement before 2022, or

    • (ii) the purchaser

      • (A) entered into the sale agreement after 2021, and

      • (B) entered into another agreement in writing before 2022 with the vendor in respect of the vessel, under which the purchaser

        • (I) paid a deposit in respect of the vessel to the vendor before 2022,

        • (II) agrees to enter into the sale agreement, and

        • (III) agrees to forfeit the deposit if the purchaser fails to enter into the sale agreement;

  • (b) the sale agreement was entered into between the purchaser and the vendor in the course of the vendor’s business of offering vessels for sale;

  • (c) the vessel is delivered or made available in Canada in relation to the sale agreement;

  • (d) possession of the vessel is transferred to the purchaser under the sale agreement at a particular time;

  • (e) the vendor is a registered vendor in respect of subject vessels at the particular time; and

  • (f) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject vessels under Division 5 of Part 1 of the Act at, or at any time before, the particular time.

Marginal note:Partial ownership

4 For the purposes of sections 2 and 3, a particular person transfers ownership of an aircraft or vessel to another person even if, at the time ownership is transferred to the other person, the particular person retains partial ownership or transfers partial ownership to any third person.

PART 2Sale of Partial Ownership

Marginal note:Prescribed circumstances – taxable amount

  • 5 (1) For the purposes of subsection 18(7) of the Act, the circumstances set out in this section are prescribed circumstances.

  • Marginal note:Taxable amount – sale of partial ownership

    (2) Subject to subsection (3), for the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a vendor sells only partial ownership of a subject item to a purchaser, the taxable amount of the subject item is the amount determined by the formula

    A + B

    where

    A
    is the greater of the value of the consideration for the sale of the subject item and the retail value of the subject item at the time at which the sale is completed; and
    B
    is the total of all amounts, each of which is the greater of the value of the consideration for, and the fair market value of, an improvement in respect of the subject item that is provided by the vendor, or a person that does not deal at arm’s length with the vendor, in connection with the sale of the subject item, but only to the extent that the amount is not included in the determination of A.

  • Marginal note:Multiple sales of partial ownership

    (3) For the purposes of section 18 of the Act and for the purposes of determining under section 34 of the Act the amount of tax payable under section 18 of the Act, if a particular sale of only partial ownership of a subject item between a vendor and a purchaser is completed at a particular time and if another sale of only partial ownership of the subject item between the vendor and a purchaser is completed at or after the particular time, the taxable amount of the subject item in respect of the other sale is equal to zero if

    • (a) the taxable amount of the subject item in respect of the particular sale is determined under subsection (2); and

    • (b) before the particular time, the vendor entered into an agreement in writing for the particular sale and an agreement in writing for the other sale.

PART 3Exportation

Marginal note:Prescribed circumstances – aircraft

  • 6 (1) For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances.

  • Marginal note:Tax not payable – aircraft

    (2) The tax under section 18 of the Act in respect of a sale of a subject aircraft by a vendor to a purchaser is not payable if

    • (a) the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed;

    • (b) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time;

    • (c) an exemption certificate does not apply in respect of the sale in accordance with section 36 of the Act;

    • (d) the subject aircraft

      • (i) is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor,

      • (ii) is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation, and

      • (iii) is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation; and

    • (e) the vendor maintains evidence satisfactory to the Minister of the exportation of the subject aircraft.

Marginal note:Prescribed circumstances – aircraft

  • 7 (1) For the purposes of subsection 36(3) of the Act, the circumstances set out in this section are prescribed circumstances.

  • Marginal note:Exemption certificate – aircraft

    (2) Subject to subsection (3), an exemption certificate applies in respect of a sale of a subject aircraft by a vendor to a purchaser if

    • (a) the vendor is a registered vendor in respect of subject aircraft at the particular time at which the sale is completed;

    • (b) the certificate is made in prescribed form containing prescribed information;

    • (c) the certificate includes

      • (i) the identification number of the subject aircraft,

      • (ii) a declaration by the purchaser that

        • (A) the subject aircraft is to be exported as soon after the particular time as is reasonable having regard to the circumstances surrounding the exportation, the sale and, if applicable, the normal business practice of the purchaser and vendor,

        • (B) the subject aircraft is not to be used in Canada at any time before the exportation except to the extent reasonably necessary or incidental to its manufacture, offering for sale, transportation or exportation,

        • (C) the subject aircraft is not to be registered with the Government of Canada or a province before the exportation except if the registration is done solely for a purpose incidental to its manufacture, offering for sale, transportation or exportation, and

        • (D) the purchaser is neither registered, nor required to be registered, as a vendor in respect of subject aircraft under Division 5 of Part 1 of the Act at the particular time, and

      • (iii) an acknowledgement by the purchaser that the purchaser is assuming liability to pay any amount of tax in respect of the subject aircraft that is or may become payable by the purchaser under the Act;

    • (d) the purchaser provides to the vendor, in a manner satisfactory to the Minister, the certificate in respect of the sale; and

    • (e) the vendor retains the certificate.

  • Marginal note:Exemption certificate – multiple purchasers

    (3) If a subject aircraft is sold by a vendor to more than one purchaser, an exemption certificate applies in respect of the sale of the subject aircraft only if, in the absence of this subsection, an exemption certificate would apply in respect of each purchaser in accordance with subsection (2).

PART 4Miscellaneous

Marginal note:Information return – prescribed person

8 For the purposes of subsection 59(1) of the Act, a person is a prescribed person for a reporting period of the person if the person

  • (a) is a registered vendor in respect of subject vehicles throughout the reporting period; and

  • (b) is not otherwise registered, or required to be registered, under Division 5 of Part 1 of the Act at any time during the reporting period.

Marginal note:General penalty – prescribed provision

9 For the purposes of paragraph 119(a) of the Act, subsection 71(2) of the Act is a prescribed provision.

PART 5Agreements Before 2022

Marginal note:Prescribed circumstances

  • 10 (1) For the purposes of section 33 of the Act, the circumstances set out in this section are prescribed circumstances.

  • Marginal note:Tax not payable on sale

    (2) Neither the tax under section 18 of the Act nor the tax under section 29 of the Act in respect of a subject item that is sold by a vendor to a purchaser is payable if the purchaser entered into an agreement in writing before 2022 with the vendor for the sale of the subject item in the course of the vendor’s business of offering for sale that type of subject item.

  • Marginal note:Tax not payable on import

    (3) The tax under section 20 of the Act in respect of a subject item that is imported is not payable if

    • (a) the importer entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the importer by way of sale; and

    • (b) the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item.

  • Marginal note:Tax not payable on use

    (4) The tax under section 26 of the Act in respect of a subject item that is used in Canada at a particular time is not payable if

    • (a) a person entered into an agreement in writing before 2022 with a vendor for the transfer of ownership of the subject item to the person by way of sale;

    • (b) the agreement was entered into in the course of the vendor’s business of offering for sale that type of subject item; and

    • (c) the person is an owner of the subject item at the particular time.

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