Amounts Eligible for Section 254 GST Housing Rebate for Homes Purchased from a Builder

Please note that the following Policy Statement, although correct at the time of issue, may not have been updated to reflect any subsequent legislative changes.

GST/HST Policy Statement P-052

Date of Issue

March 3, 1993

Subject

Amounts eligible for s. 254 GST Housing Rebate for homes purchased from a builder.

Legislative Reference(s)

Section 123 - definitions of "mobile home", "residential complex", and "residential condominium unit" , and section 138, paragraphs 254(2)(c), (h) and (i) of the ETA.

National Coding System File Number(s)

11950-1

Effective Date

January 1, 1991

A supply of a residential complex may include other supplies provided together with the residential complex for a single consideration. Where otherwise eligible, an individual purchasing a newly constructed or substantially renovated single unit residential complex or residential condominium unit from a builder could claim the GST New Housing Rebate under section 254 in respect of other supplies (such as free standing appliances) that:

• form part of an all-inclusive single consideration made at the time of signing the agreement of purchase and sale for the complex or unit, and there is no separate identification in the agreement for the consideration paid or payable for the other supplies.
• are of the type normally supplied by the builder for similar residences, were not custom ordered by the purchaser of the complex or unit (as opposed to simple colour changes or normal upgrades), may be offered generally by others in the construction industry, and relate to the use and enjoyment of the complex or unit by the purchaser; and
• the purchaser did not have a choice of taking a cash discount or other supply in lieu of the incidental supply in question.

It should be noted that fixtures, including built-in appliances, would normally form part of the residential complex or unit and, therefore, if paid to the builder, are eligible for the GST new housing rebate, providing the requirements relating to the rebate are otherwise satisfied.

SAMPLE RULINGS

EXAMPLE 1

Facts

1. An individual purchases a newly constructed home from a builder for $150,000.00.

2. He agrees to pay a lump sum deposit on signing the agreement, and then progress payments over the three months prior to the scheduled closing of the transaction for the supply of the new house.

3. Subsequent to signing the agreement of purchase and sale for the new house, he enters into a separate agreement with the builder for additional consideration to purchase a fridge, stove, washer and dryer for a fixed amount. All the appliances are free-standing.

Ruling Requested

Is the purchaser entitled to claim a new housing rebate for the free-standing appliances?

Ruling Provided

Since the supply of the free-standing appliances to the purchaser does not form part of the consideration for the supply of the house, the purchaser is not entitled to a rebate for the amount paid for the appliances.

 

EXAMPLE 2

Facts

1. A purchaser enters into an agreement of purchase and sale with a builder for the purchase of a newly constructed home as his primary place of residence.

2. At the time of signing the agreement, the purchaser agrees to purchase five free-standing appliances (fridge, stove, microwave, washer and dryer) with the house. These appliances are standard appliances that the builder offers with all homes sold and are not separately identified in the agreement of purchase and sale.

3. The amounts for the appliances are included in the purchase price of the house.

Ruling Requested

Is the purchaser entitled to claim a new housing rebate for the value of the appliances?

Ruling Provided

The purchaser is entitled to claim a new housing rebate calculated on the total single consideration paid for the house including the appliances.

 

EXAMPLE 3

Facts

1. An individual purchases a newly constructed home from a builder and included in the purchase price of the house are four free-standing appliances.

2. The agreement of purchase and sale indicates that a total of $210,000 is payable; $200,000 is the amount of the consideration payable for the house itself and an additional $10,000 is the amount payable for the appliances.

Ruling Requested

Is the purchaser entitled to claim a rebate for the value of the appliances?

Ruling Provided

The purchaser may claim a rebate calculated on $200,000.00 provided all the criteria for the rebate are met (e.g., it is occupied as his/her primary place of residence, etc.). However, there is no rebate available for the $10,000 paid in respect of the appliances for the house as this supply is separately identified in the agreement of purchase and sale.