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

Full Document:  

Act current to 2022-09-11 and last amended on 2022-09-01. Previous Versions

Marginal note:Definitions

  •  (1) The definitions in this subsection apply in this section.

    first use

    first use, in respect of a residential unit, means the first use of the unit after the construction or last substantial renovation of the unit or, in the case of a unit that is situated in a multiple unit residential complex, of the complex or addition to the complex in which the residential unit is situated is substantially completed. (première utilisation)

    percentage of total floor space

    percentage of total floor space, in respect of a residential unit forming part of a residential complex or part of an addition to a multiple unit residential complex, means the proportion (expressed as a percentage) that the total square metres of floor space occupied by the unit is of the total square metres of floor space occupied by all of the residential units in the residential complex or addition, as the case may be. (pourcentage de superficie totale)

    qualifying portion of basic tax content

    qualifying portion of basic tax content, at a particular time, of property of a person means the amount that would be the basic tax content of the property at that time if that amount were determined without reference to subparagraph (v) of the description of A in the definition basic tax content in subsection 123(1) and if no amount of tax under any of subsections 165(2), 212.1(2) and 218.1(1) and Division IV.1 were included in determining that basic tax content. (fraction admissible de teneur en taxe)

    qualifying residential unit

    qualifying residential unit of a person, at a particular time, means

    • (a) a residential unit of which, at or immediately before the particular time, the person is the owner, a co-owner, a lessee or a sub-lessee or has possession as purchaser under an agreement of purchase and sale, or a residential unit that is situated in a residential complex of which the person is, at or immediately before the particular time, a lessee or a sub-lessee, where

      • (i) at the particular time, the unit is a self-contained residence,

      • (ii) the person holds the unit

        • (A) for the purpose of making exempt supplies of the unit that are included in section 5.1, 6.1, 6.11 or 7 of Part I of Schedule V,

        • (A.1) for the purpose of making exempt supplies of property or a service that includes giving possession or use of the unit to a person under a lease to be entered into for the purpose of its occupancy by an individual as a place of residence, or

        • (B) if the complex in which the unit is situated includes one or more other residential units that would be qualifying residential units of the person without regard to this clause, for use as the primary place of residence of the person,

      • (iii) it is the case, or can reasonably be expected by the person at the particular time to be the case, that the first use of the unit is or will be

        • (A) as the primary place of residence of the person or a relation of the person, or of a lessor of the complex or a relation of that lessor, for a period of at least one year or for a shorter period where the next use of the unit after that shorter period is as described in clause (B), or

        • (B) as a place of residence of individuals, each of whom is given continuous occupancy of the unit, under one or more leases, for a period, throughout which the unit is used as the primary place of residence of that individual, of at least one year or for a shorter period ending when

          • (I) the unit is sold to a recipient who acquires the unit for use as the primary place of residence of the recipient or of a relation of the recipient, or

          • (II) the unit is taken for use as the primary place of residence of the person or a relation of the person or of a lessor of the complex or a relation of that lessor, and

      • (iv) except where subclause (iii)(B)(II) applies, if, at the particular time, the person intends that, after the unit is used as described in subparagraph (iii), the person will occupy it for the person’s own use or the person will supply it by way of lease as a place of residence or lodging for an individual who is a relation, shareholder, member or partner of, or not dealing at arm’s length with, the person, the person can reasonably expect that the unit will be the primary place of residence of the person or of that individual; or

    • (b) a prescribed residential unit of the person. (habitation admissible)

    relation

    relation has the meaning assigned by subsection 256(1). (proche)

    self-contained residence

    self-contained residence means a residential unit

    • (a) that is a suite or room in a hotel, a motel, an inn, a boarding house or a lodging house or in a residence for students, seniors, individuals with a disability or other individuals; or

    • (b) that contains private kitchen facilities, a private bath and a private living area. (résidence autonome)

  • Marginal note:Reference to “lease”

    (2) In this section, a reference to a “lease” shall be read as a reference to a “lease, licence or similar arrangement”.

  • Marginal note:Rebate in respect of land and building for residential rental accommodation

    (3) If

    • (a) a particular person, other than a cooperative housing corporation,

      • (i) is the recipient of a taxable supply by way of sale (in this subsection referred to as the “purchase from the supplier”) from another person of a residential complex or of an interest in a residential complex and is not a builder of the complex, or

      • (ii) is a builder of a residential complex, or of an addition to a multiple unit residential complex, that gives possession or use of a residential unit in the complex or addition to another person under a lease entered into for the purpose of its occupancy by an individual as a place of residence that results in the particular person being deemed under section 191 to have made and received a taxable supply by way of sale (in this subsection referred to as the “deemed purchase”) of the complex or addition,

    • (b) at a particular time, tax first becomes payable in respect of the purchase from the supplier or tax in respect of the deemed purchase is deemed to have been paid by the person,

    • (c) at the particular time, the complex or addition, as the case may be, is a qualifying residential unit of the person or includes one or more qualifying residential units of the person, and

    • (d) the person is not entitled to include the tax in respect of the purchase from the supplier, or the tax in respect of the deemed purchase, in determining an input tax credit of the person,

    the Minister shall, subject to subsections (7) and (8), pay a rebate to the person equal to the total of all amounts each of which is an amount, in respect of a residential unit that forms part of the residential complex or addition, as the case may be, and is a qualifying residential unit of the person at the particular time, determined by the formula

    A × ($450,000 - B)/$100,000

    where

    A
    is the lesser of $6,300 and the amount determined by the formula

    A1 × A2

    where

    A1
    is 36% of the total tax under subsection 165(1) that is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and
    A2
    is
    • (i) if the unit is a single unit residential complex or a residential condominium unit, 1, and

    • (ii) in any other case, the unit’s percentage of total floor space, and

    B
    is the greater of $350,000 and
    • (i) if the unit is a single unit residential complex or a residential condominium unit, the fair market value of the unit at the particular time, and

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

      B1 × B2

      where

      B1
      is the unit’s percentage of total floor space, and
      B2
      is the fair market value at the particular time of the residential complex or addition, as the case may be.
  • Marginal note:Rebate in respect of sale of building and lease of land

    (4) If

    • (a) a person, other than a cooperative housing corporation, is a builder of a residential complex or of an addition to a multiple unit residential complex and the person makes

      • (i) an exempt supply by way of sale, included in section 5.1 of Part I of Schedule V, of a building or part of a building, and

      • (ii) an exempt supply, included in section 7 of that Part, of land by way of lease or an exempt supply, included in that section, by way of assignment of a lease in respect of land,

    • (b) the lease provides for continuous possession or use of the land for a period of at least twenty years or it contains an option to purchase the land,

    • (c) those supplies result in the person being deemed under section 191 to have made and received a taxable supply by way of sale of the complex or addition and to have paid tax at a particular time in respect of that supply,

    • (d) in the case of a multiple unit residential complex or an addition to such a complex, the complex or addition, as the case may be, includes, at the particular time, one or more qualifying residential units of the person,

    • (e) the person is not entitled to include the tax deemed to have been paid by the person in determining an input tax credit of the person, and

    • (f) in the case of an exempt supply by way of sale of a single unit residential complex or a residential condominium unit, the recipient of that supply is entitled to claim a rebate under subsection 254.1(2) in respect of the complex or unit,

    the Minister shall, subject to subsections (7) and (8), pay a rebate to the person equal to the total of all amounts each of which is an amount, in respect of a residential unit that forms part of the complex or addition, as the case may be, and is, in the case of a multiple unit residential complex or an addition to such a complex, a qualifying residential unit of the person at the particular time, determined by the formula

    [A × ($450,000 - B)/$100,000] - C

    where

    A
    is the lesser of $6,300 and the amount determined by the formula

    A1 × A2

    where

    A1
    is 36% of the tax under subsection 165(1) that is deemed to have been paid by the person at the particular time, and
    A2
    is
    • (i) if the unit is a single unit residential complex or a residential condominium unit, 1, and

    • (ii) in any other case, the unit’s percentage of total floor space,

    B
    is the greater of $350,000 and
    • (i) if the unit is a single unit residential complex or a residential condominium unit, the fair market value of the unit at the particular time, and

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

      B1 × B2

      where

      B1
      is the unit’s percentage of total floor space, and
      B2
      is the fair market value at the particular time of the residential complex or addition, as the case may be, and
    C
    is the amount of the rebate, if any, under subsection 254.1(2) that the recipient of the exempt supply by way of sale is entitled to claim in respect of the complex or unit.
  • Marginal note:Rebate for cooperative housing corporation

    (5) If

    • (a) a cooperative housing corporation (in this subsection referred to as the “cooperative”)

      • (i) is the recipient of a taxable supply by way of sale (in this subsection referred to as the “purchase from the supplier”) from another person of a residential complex or of an interest in a residential complex and is not a builder of the complex, or

      • (ii) is a builder of a residential complex, or of an addition to a multiple unit residential complex, who makes an exempt supply by way of lease included in section 6 of Part I of Schedule V that results in the cooperative being deemed under section 191 to have made and received a taxable supply by way of sale (in this subsection referred to as the “deemed purchase”) of the complex or addition and to have paid tax in respect of that supply,

    • (b) the cooperative is not entitled to include the tax in respect of the purchase from the supplier, or the tax in respect of the deemed purchase, in determining an input tax credit of the cooperative, and

    • (c) at any time at which a residential unit included in the complex is a qualifying residential unit of the cooperative, the cooperative first gives occupancy of the unit after its construction or last substantial renovation under an agreement for a supply of that unit that is an exempt supply included in section 6 of Part I of Schedule V,

    the Minister shall, subject to subsections (7) and (8), pay a rebate to the cooperative in respect of that unit equal to the amount determined by the formula

    [A × ($450,000 - B)/$100,000] - C

    where

    A
    is the lesser of $6,300 and the amount determined by the formula

    A1 × A2

    where

    A1
    is 36% of the total tax under subsection 165(1) that is payable in respect of the purchase from the supplier or is deemed to have been paid in respect of the deemed purchase, and
    A2
    is
    • (i) if the unit is a single unit residential complex, 1, and

    • (ii) in any other case, the unit’s percentage of total floor space,

    B
    is the greater of $350,000 and
    • (i) if the unit is a single unit residential complex or a residential condominium unit, the fair market value of the unit at the particular time at which tax first becomes payable in respect of the purchase from the supplier or tax in respect of the deemed purchase is deemed to have been paid by the cooperative, and

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

      B1 × B2

      where

      B1
      is the unit’s percentage of total floor space, and
      B2
      is the fair market value of the complex at the particular time, and
    C
    is the amount of the rebate, if any, under subsection 255(2) that the recipient of the exempt supply of the unit was entitled to claim in respect of the unit.
  • Marginal note:Rebate for land leased for residential purposes

    (6) If

    • (a) a person makes an exempt supply of land

      • (i) that is a supply included in paragraph 7(a) of Part I of Schedule V made to a person described in subparagraph (i) of that paragraph, or that is a supply, included in paragraph 7(b) of that Part, of a site in a residential trailer park, and

      • (ii) that results in the person being deemed under any of subsections 190(3) to (5), 200(2), 206(4) and 207(1) to have made and received a taxable supply by way of sale of the land and to have paid tax, at a particular time, in respect of that supply,

    • (b) in the case of an exempt supply of land described in paragraph 7(a) of Part I of Schedule V, the residential unit that is or is to be affixed to the land is or will be so affixed for the purpose of its use and enjoyment as a primary place of residence for individuals, and

    • (c) the person is not entitled to include the tax deemed to have been paid by the person in determining an input tax credit of the person,

    the Minister shall, subject to subsections (7) and (8), pay a rebate to the person equal to the amount determined by the formula

    A × ($112,500 - B)/$25,000

    where

    A
    is
    • (i) in the case of a taxable supply in respect of which the person is deemed to have paid tax calculated on the fair market value of the land, 36% of the tax under subsection 165(1) that is deemed to have been paid in respect of that supply, and

    • (ii) in the case of a taxable supply in respect of which the person is deemed to have paid tax equal to the basic tax content of the land, 36% of the qualifying portion of the basic tax content of the land at the particular time, and

    B
    is the greater of $87,500 and
    • (i) in the case of a supply of land included in paragraph 7(a) of Part I of Schedule V, the fair market value of the land at the particular time, and

    • (ii) in the case of a supply of a site in a residential trailer park or in an addition to a residential trailer park, the fair market value, at the particular time, of the park or addition, as the case may be, divided by the total number of sites in the park or addition, as the case may be, at the particular time.

  • Marginal note:Adjustment for transitional rebate

    (6.1) For the purposes of determining the amount of a particular rebate in respect of a residential complex, an interest in a residential complex or an addition to a multiple unit residential complex payable to a person under any of subsections (3) to (5), the amount of the total tax under subsection 165(1) included in the calculation made under the formulae in subsections (3) to (5) shall be reduced by the total of all rebates payable to the person under any of sections 256.3 to 256.77 in respect of the residential complex, interest or addition, as the case may be, if the person

    • (a) was not entitled to the particular rebate under this section as it read immediately after it was last amended by an Act of Parliament that was assented to before February 26, 2008; and

    • (b) is entitled to the particular rebate under this section as it reads immediately after the Budget Implementation Act, 2008 has been assented to.

  • Marginal note:Application for rebate and payment of tax

    (7) A rebate shall not be paid to a person under this section unless

    • (a) the person files an application for the rebate within two years after

      • (i) in the case of a rebate under subsection (5), the end of the month in which the person makes the exempt supply referred to in subparagraph (5)(a)(ii),

      • (ii) in the case of a rebate under subsection (6), the end of the month in which the tax referred to in that subsection is deemed to have been paid by the person, and

      • (iii) in any other case of a rebate in respect of a residential unit, 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 unit or interest in the unit or in respect of the residential complex or addition, or interest therein, in which the unit is situated;

    • (b) 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; and

    • (c) 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 for the reporting period and has remitted all net tax remittable, if any, as reported in that return.

  • Marginal note:Special rules

    (8) For the purposes of this section,

    • (a) if, at any time, substantially all of the residential units in a multiple unit residential complex containing ten or more residential units are residential units in respect of which the condition set out in subparagraph (a)(iii) of the definition qualifying residential unit in subsection (1) is satisfied, all of the residential units in the complex are deemed to be residential units in respect of which that condition is satisfied at that time; and

    • (b) except in the case of residential units referred to in paragraph (a) of the definition self-contained residence in subsection (1),

      • (i) the two residential units that are located in a multiple unit residential complex containing only those two residential units are deemed to together form a single residential unit, and the complex is deemed to be a single unit residential complex and not to be a multiple unit residential complex, and

      • (ii) if a residential unit (in this subparagraph referred to as a “specified unit”) in a building affords direct internal access (with or without the use of a key or similar device) to another area of the building that is all or part of the living area of a particular residential unit, the specified unit is deemed to be part of the particular residential unit and not to be a separate residential unit.

  • Marginal note:Restrictions

    (9) No rebate shall be paid to a person under this section if all or part of the tax included in determining the rebate would otherwise be included in determining a rebate of the person under any of sections 254, 256, 256.1 and 259 and, in determining the rebate of a person under this section, there shall not be included any amount of tax that the person is, under an Act of Parliament (other than this Act) or any other law,

    • (a) not required to pay or remit; or

    • (b) entitled to recover by way of a rebate, refund or remission.

  • Marginal note:Repayment of rebate

    (10) If a person was entitled to claim a rebate under subsection (3) in respect of a qualifying residential unit (other than a unit located in a multiple unit residential complex) and, within one year after the unit is first occupied as a place of residence after the construction or last substantial renovation of the unit was substantially completed, the person makes a supply by way of sale (other than a supply deemed under section 183 or 184 to have been made) of the unit to a purchaser who is not acquiring the unit for use as the primary place of residence of the purchaser or of a relation of the purchaser, the person shall pay to the Receiver General an amount equal to the rebate plus interest at the prescribed rate less 2% per year, calculated on that amount for the period beginning on the day the rebate was paid or applied to a liability of the person and ending on the day the amount of the rebate is paid by the person to the Receiver General.

  • [NOTE: Application provisions are not included in the consolidated text
  • see relevant amending Acts and regulations.]
  • 2001, c. 15, s. 16
  • 2006, c. 4, ss. 28, 144
  • 2007, c. 35, s. 192
  • 2008, c. 28, s. 77
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