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

Marginal note:Application for rebate

• 58 (1) For the purposes of subsection 256.21(2) of the Act, an application for a rebate, the amount of which is determined under this Division, must be filed before July 1, 2014.

• Marginal note:Restriction

  (2) If a person is the builder of a complex, the Minister shall pay a rebate in respect of the complex to the person under subsection 256.21(1) of the Act, the amount of which is determined under subsection 56(4) or 57(4), only if the Minister is satisfied, by a certificate, statement or other documentary evidence as the Minister may require, that the person is in good standing with respect to the payment of all taxes, and fees relating to the construction activities of the builder, imposed under an Act of the legislature of the province in which the residential complex is situated.

• Marginal note:Rebate based on floor space

  (3) In determining under subsection 57(4) the amount of a rebate payable to a person in respect of a residential complex, the estimated provincial levy for the complex must be determined based on the interior floor space of the complex if the person applies for the rebate before the day on which tax under Part IX of the Act becomes payable in respect of a supply of the complex by the person.

PART 9.1Prince Edward Island Real Property Transitional Rules

DIVISION 1Interpretation

Marginal note:Application of subsections 48(2) and (3)

58.01 Subsections 48(2) and (3) apply for the purposes of this Part.

DIVISION 2Application

Marginal note:Application

• 58.02 (1) Subject to subsection (2) and to Division 3 and section 58.24 of the New Harmonized Value-added Tax System Regulations, subsection 165(2) of the Act and the provisions of Part IX of the Act (other than Divisions IX and X of that Part) relating to tax under that subsection apply to

  • (a) any supply of real property made in Prince Edward Island on or after April 1, 2013;

  • (b) any supply by way of sale of real property made in Prince Edward Island before April 1, 2013 if ownership and possession of that property are transferred to the recipient of the supply on or after April 1, 2013;

  • (c) any supply of real property made in Prince Edward Island before April 1, 2013 by way of lease, licence or similar arrangement if all of the consideration for the supply becomes due or is paid without having become due, or is deemed to have become due or to have been paid, on or after April 1, 2013 and is not deemed to have become due or to have been paid before that day; and

  • (d) any supply of real property made in Prince Edward Island before April 1, 2013 by way of lease, licence or similar arrangement if part of the consideration for the supply becomes due or is paid without having become due, or is deemed to have become due or to have been paid, on or after April 1, 2013.

• Marginal note:Exception

  (2) Subject to Division 3, tax under subsection 165(2) of the Act is not payable in respect of any part of the consideration for a supply referred to in paragraph (1)(d) that becomes due or is paid before April 1, 2013 and is not deemed to have become due or to have been paid on or after that day.

Marginal note:Agreement not indicating tax

58.03 If

• (a) a builder of a residential complex makes a taxable supply by way of sale of the complex in Prince Edward Island under an agreement of purchase and sale entered into after November 8, 2012 and before April 1, 2013,

• (b) tax under subsection 165(2) of the Act becomes payable in respect of the supply,

• (c) the agreement does not indicate in writing

  • (i) the total tax payable in respect of the supply in a manner that clearly indicates the amount of that total and whether or not that amount takes into account any amount to be paid or credited in accordance with subsection 254(4) of the Act, and

  • (ii) the total of the rates at which tax is payable in respect of the supply, and

• (d) the builder is required under section 221 of the Act to collect tax in respect of the supply,

the following rules apply:

• (e) for the purposes of Part IX of the Act the consideration for the supply is deemed to be the amount determined by the formula

  (100%/A) × B

  where

  A

  is the total of 100% and the rate at which tax under subsection 165(2) of the Act is calculated in respect of the supply, and

  B

  is the consideration for the supply as otherwise determined under Part IX of the Act, and

• (f) for the purposes of Part IX of the Act, the builder is deemed to have collected, and the recipient is deemed to have paid, on the earlier of the day ownership of the complex is transferred to the recipient and the day possession of the complex is transferred to the recipient under the agreement, tax under subsection 165(2) of the Act calculated on the consideration for the supply.

DIVISION 3Transition

Marginal note:Transfer of single unit residential complex after March 2013

• 58.04 (1) If

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

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

  • (c) possession of the complex is transferred to the individual under the agreement at any time on or after April 1, 2013,

  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, if immediately after March 2013, the construction or last substantial renovation of the complex is less than 90% completed, the original vendor is deemed to have made another taxable supply in respect of the complex and to have collected, at the earlier of the time ownership of the complex is transferred to the individual and the time possession of the complex is transferred to the individual under the agreement, tax under Division II of Part IX of the Act in respect of the other supply equal to

    • (i) 4.5% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, less than 10% completed,

    • (ii) 3.38% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 10% or more but less than 25% completed,

    • (iii) 2.25% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 25% or more but less than 50% completed,

    • (iv) 1.13% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 50% or more but less than 75% completed, and

    • (v) 0.45% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after March 2013, 75% or more but less than 90% completed,

  • (f) for the purposes of paragraph (e), 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, and

  • (g) for the purposes of Division 4, the complex is deemed not to be a specified single unit residential complex.

• Marginal note:Assignment of agreement

  (2) The rules in paragraphs (1)(d) to (g) apply in respect of an agreement described in paragraph (1)(a) in respect of a single unit residential complex (other than a floating home or a mobile home) if the following circumstances apply:

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

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

  • (c) possession of the complex is transferred to the particular individual under the agreement at any time on or after April 1, 2013; and

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

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

    • (ii) the original vendor of the complex and the individual who 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 “individual” in paragraph (1)(e) is to be read as a reference to the “particular individual”.

• Marginal note:Input tax credit — resale

  (3) If an individual makes a particular taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) to a person under an agreement evidenced in writing, the individual 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 individual and for the purposes of section 58.07, the individual 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 person, tax in respect of the other supply equal to 4.5% of the consideration for the previous supply made to the individual by the original vendor of the complex.

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

  (4) If a particular individual is the recipient of a taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) 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 individual shall,

    • (i) if the particular individual is a registrant and acquired the complex for use or supply primarily in the course of commercial activities of the particular individual, on or before the day on or before which the particular individual’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:Transfer of residential condominium unit after March 2013

• 58.05 (1) If

  • (a) a particular taxable supply by way of sale of a residential condominium unit 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 unit is transferred to the person under the agreement before April 1, 2013, and

  • (c) possession of the unit is transferred to the person under the agreement at any time on or after April 1, 2013,

  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 unit and to have collected, at the earlier of the time ownership of the unit is transferred to the person and the time possession of the unit is transferred to the person under the agreement, 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 unit at the time the agreement is entered into if the construction of the unit or, in the case of a substantial renovation of the unit, the last substantial renovation of the unit, 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 residential condominium unit if the following circumstances apply:

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

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

  • (c) possession of the unit is transferred to the particular person under the agreement at any time on or after April 1, 2013; 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 unit 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 unit 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 unit.

  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 residential condominium unit to another person under an agreement evidenced in writing, the particular person is the recipient of a previous supply of the unit 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, the particular person is deemed to have received another taxable supply in respect of the unit 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 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 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 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.