New Harmonized Value-added Tax System Regulations, No. 2 (SOR/2010-151)

Marginal note:Transfer of condominium complex after March 2013

• 58.06 (1) If

  • (a) a particular taxable supply by way of sale of a condominium complex is made in Prince Edward Island to a person under an agreement, evidenced in writing, entered into between the supplier (in this section referred to as the “original vendor”) and the person on or before November 8, 2012,

  • (b) neither ownership nor possession of the complex is transferred to the person under the agreement before April 1, 2013, and

  • (c) at any time on or after April 1, 2013, ownership of the complex is transferred to the person under the agreement or the complex is registered as a condominium,

  the following rules apply:

  • (d) no tax is payable under subsection 165(2) of the Act in respect of the particular supply,

  • (e) for the purposes of Part IX of the Act, the original vendor is deemed to have made another taxable supply in respect of the complex and to have collected, on the earlier of the day ownership of the complex is transferred to the person under the agreement and the day that is sixty days after the day on which the complex is registered as a condominium, tax under Division II of Part IX of the Act in respect of the other supply equal to 4.5% of the consideration for the particular supply, and

  • (f) for the purposes of paragraph (e) and Division 4, if the value of the consideration for the particular supply is less than the amount that would be the fair market value of the complex at the time the agreement is entered into if the construction of the complex or, in the case of a substantial renovation of the complex, the last substantial renovation of the complex, were substantially completed at that time, the consideration is deemed to be equal to that amount.

• Marginal note:Assignment of agreement

  (2) The rules in paragraphs (1)(d) to (f) apply in respect of an agreement described in paragraph (1)(a) in respect of a condominium complex if the following circumstances apply:

  • (a) the agreement is assigned to a particular person;

  • (b) neither ownership nor possession of the complex is transferred to any person under the agreement before April 1, 2013;

  • (c) at any time on or after April 1, 2013, ownership of the complex is transferred to the particular person or the complex is registered as a condominium; and

  • (d) the following conditions are met in respect of the assignment of the agreement to the particular person and in respect of every other assignment of the agreement made prior to the assignment to the particular person:

    • (i) a novation of the agreement has not occurred,

    • (ii) the original vendor of the complex and the person that assigns the agreement deal with each other at arm’s length and are not associated with each other, and

    • (iii) neither the original vendor of the complex nor any person that does not deal at arm’s length with, or that is associated with, the original vendor acquires an interest in the complex.

  In applying those rules, the reference to the “person” in paragraph (1)(e) is to be read as a reference to the “particular person”.

• Marginal note:Input tax credit — resale

  (3) If a particular person makes a particular taxable supply by way of sale of a condominium complex, or any residential condominium unit located in a condominium complex, to another person under an agreement evidenced in writing, the particular person is the recipient of a previous supply of the complex in respect of which no tax is payable under subsection 165(2) of the Act pursuant to subsection (1) or (2) and tax under subsection 165(2) of the Act is payable in respect of the particular supply, for the purposes of determining an input tax credit of the particular person and for the purposes of section 58.07,

  • (a) if the particular supply is a supply of a condominium complex, the particular person is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the complex is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the particular person by the original vendor of the complex; or

  • (b) if the particular supply is a supply of a residential condominium unit located in a condominium complex, the particular person is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the unit is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the particular person by the original vendor of the complex multiplied by the percentage of total floor space (as defined in subsection 256.2(1) of the Act) of the unit.

• Marginal note:Self-assessment on acquisition of real property

  (4) If a particular person is the recipient of a taxable supply by way of sale of a condominium complex or residential condominium unit from another person, tax under subsection 165(2) of the Act is payable in respect of the supply, no tax would have been payable under subsection 165(2) of the Act in respect of the supply if subsection (2) were read without reference to subparagraph (2)(d)(iii) and the other person would, in the absence of this subsection, be required under section 221 of the Act to collect tax in respect of the supply, the following rules apply:

  • (a) despite section 221 of the Act, the other person is not required to collect tax under subsection 165(2) of the Act in respect of the supply; and

  • (b) the particular person shall

    • (i) if the particular person is a registrant and acquired the complex or unit for use or supply primarily in the course of commercial activities of the particular person, on or before the day on or before which the particular person’s return for the reporting period in which the tax became payable is required to be filed, pay the tax payable under subsection 165(2) of the Act in respect of the supply to the Receiver General and report that tax in that return, and

    • (ii) in any other case, on or before the last day of the month following the calendar month in which the tax became payable, pay the tax payable under subsection 165(2) of the Act to the Receiver General and file with the Minister in prescribed manner a return in respect of the tax under subsection 165(2) of the Act in prescribed form containing prescribed information.

Marginal note:Non-registrant rebate

• 58.07 (1) For the purposes of subsection 256.21(1) of the Act, if a person that is not a registrant is deemed to have paid tax under subsection 58.04(3), 58.05(3) or 58.06(3) in respect of a taxable supply that is in respect of a residential complex, the person is a prescribed person and the amount of the rebate in respect of the complex under subsection 256.21(1) of the Act is equal to the amount of that tax.

• Marginal note:Application for rebate

  (2) 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), must be filed within two years after the day on which the tax referred to in that subsection is deemed to have been paid.

DIVISION 4Transitional New Housing Rebates

Marginal note:Definitions

• 58.08 (1) The following definitions apply in this Division.

  estimated provincial levy

  estimated provincial levy, in respect of a rebate in relation to a specified residential complex or a specified single unit residential complex means

  • (a) if, in an application filed for the rebate, the amount applied for is not based on the fair market value of the complex or the consideration for the supply of the complex, the amount determined by the formula

    A × B

    where

    A

    is

    • (i) if the complex is not a residential condominium unit, the number of square metres of the interior floor space of the complex, and

    • (ii) if the complex is a residential condominium unit, the total of

      • (A) the number of square metres of the interior floor space of the unit, and

      • (B) the amount equal to the total number of square metres of interior floor space of the common areas of the condominium complex in which the unit is situated multiplied by the fraction obtained by dividing the number of square metres of interior floor space of the unit by the total number of square metres of interior floor space of all condominium units in the condominium complex, and

    B

    is $60; and

  • (b) in any other case, the amount determined by the formula

    A × 4.5%

    where

    A

    is

    • (i) in the case where a builder of the complex was deemed under section 191 of the Act to have collected, at any time, tax in respect of the complex and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.09(4) or 58.1(4), that is payable to the builder in respect of the complex, the fair market value of the complex at that time,

    • (ii) in the case where tax was deemed under paragraph 58.05(1)(e) to have been collected in respect of a taxable supply that is in respect of the complex and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.1(4), that is payable to the builder of the complex, the consideration for the supply,

    • (iii) in the case of a complex that is a residential condominium unit, if tax was deemed under paragraph 58.06(1)(e) to have been collected in respect of a taxable supply that is in respect of the condominium complex in which the unit is situated and the rebate is a rebate under subsection 256.21(1) of the Act, the amount of which is determined under subsection 58.1(4), that is payable to the builder of the complex, the portion of the consideration for the supply that is attributable to that unit,

    • (iv) in the case of a rebate under subsection 256.21(1) of the Act, in respect of which subparagraph (i) does not apply and the amount of which is determined under subsection 58.09(4), that is payable to an individual in respect of the complex, the consideration for the supply by way of sale of the complex to the individual, or

    • (v) in the case of a rebate under subsection 256.21(1) of the Act, in respect of which subparagraphs (i) to (iii) do not apply and the amount of which is determined under subsection 58.1(4), that is payable to a builder in respect of the complex, the consideration for the supply by way of sale of the complex by the builder. (prélèvement provincial estimé)

  specified residential complex

  specified residential complex means

  • (a) a multiple unit residential complex (other than a multiple unit residential complex referred to in the definition single unit residential complex in subsection 254(1) of the Act) or an addition to a multiple unit residential complex, if the construction or last substantial renovation of the complex or addition began before April 1, 2013 and subsection 191(3) or (4) of the Act, as the case may be, did not apply, and would not have applied, in the absence of subsections 191(5) to (7) of the Act, after the day on which the construction or last substantial renovation began and before April 1, 2013, to deem a supply of the complex or addition to have been made; or

  • (b) a residential condominium unit in a condominium complex where the construction or last substantial renovation of the condominium complex began before April 1, 2013 and neither subsection 191(1) nor (2) of the Act applied, and would not have applied, in the absence of subsections 191(5) to (7) of the Act, after the construction or last substantial renovation began and before April 1, 2013, to deem a supply of the unit to have been made. (immeuble d’habitation déterminé)

  specified single unit residential complex

  specified single unit residential complex means a residential complex, other than a floating home or a mobile home,

  • (a) that is a single unit residential complex (within the meaning of subsection 254(1) of the Act);

  • (b) the construction or last substantial renovation of which began before April 1, 2013; and

  • (c) that was not occupied by any individual as a place of residence or lodging after the construction or last substantial renovation began and before April 1, 2013. (immeuble d’habitation à logement unique déterminé)

• Marginal note:Interior floor space

  (2) Subject to subsection (3), for the purposes of this Division, the interior floor space of a complex or unit includes the width of its enclosing walls that are not adjacent to any other complex or unit and half of the width of its enclosing walls that are adjacent to another complex or unit.

• Marginal note:Interior floor space

  (3) The interior floor space of a complex and of the common areas of a condominium complex does not include

  • (a) storage rooms, attics and basements, unless finished to a standard comparable to the living areas of the complex

    • (i) by the builder that supplies the complex to the person entitled to claim a rebate in respect of the complex, the amount of which is determined under this Division, or by any previous builder of the complex, if the complex is a specified single unit residential complex, and

    • (ii) by a builder of the complex, in any other case;

  • (b) parking areas; and

  • (c) areas set aside for the placement of equipment for the heating or cooling of, or the supply of water, gas or electricity to, the complex or the condominium complex.

Marginal note:Rebate for a specified single unit residential complex

• 58.09 (1) For the purposes of subsection 256.21(1) of the Act, the following circumstances are prescribed circumstances in respect of a specified single unit residential complex:

  • (a) a builder of the complex

    • (i) is deemed under section 191 of the Act to have made a taxable supply of the complex as a consequence of giving possession or use of the complex to a person or of occupying it as a place of residence, or

    • (ii) makes a taxable supply by way of sale of the complex to an individual;

  • (b) the complex is situated in Prince Edward Island;

  • (c) tax under subsection 165(2) of the Act is payable in respect of the supply;

  • (d) if subparagraph (a)(i) applies, first possession or use of the complex as a place of residence, after substantial completion of its construction or last substantial renovation, occurs on or after April 1, 2013 and before April 1, 2017;

  • (e) if subparagraph (a)(ii) applies, possession of the complex is transferred to the individual on or after April 1, 2013 and before April 1, 2017; and

  • (f) that construction or last substantial renovation of the complex is 10% or more completed immediately after March 2013.

• Marginal note:Prescribed property and person

  (2) If the circumstances described in subsection (1) are satisfied in respect of a complex, for the purposes of subsection 256.21(1) of the Act, the complex is prescribed property and

  • (a) in the case described in subparagraph (1)(a)(i), the builder referred to in paragraph (1)(a) is a prescribed person; and

  • (b) in the case described in subparagraph (1)(a)(ii), the individual referred to in that subparagraph is a prescribed person.

• Marginal note:Assignment of rebate

  (3) If the circumstances described in subsection (1) are satisfied in respect of a complex and subparagraph (1)(a)(ii) applies in respect of the complex, for the purposes of subsection 256.21(6) of the Act, the rebate under subsection 256.21(1) of the Act in respect of the complex, the amount of which is determined under subsection (4), is a prescribed rebate and that rebate may be assigned to the builder of the complex referred to in paragraph (1)(a).

• Marginal note:Amount of rebate

  (4) If the circumstances described in subsection (1) are satisfied in respect of a complex, for the purposes of subsection 256.21(1) of the Act, the amount of the rebate in respect of the complex under that subsection is

  • (a) 100% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 90% or more completed;

  • (b) 90% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 75% or more but less than 90% completed;

  • (c) 75% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 50% or more but less than 75% completed;

  • (d) 50% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 25% or more but less than 50% completed; or

  • (e) 25% of the estimated provincial levy for the complex if the construction or last substantial renovation of the complex is, immediately after March 2013, 10% or more but less than 25% completed.