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Supply of Land for Recreational Units such as Mini-homes, Park Model Trailers, and Travel Trailers

From: Canada Revenue Agency

GST/HST Policy Statement P-104

NOTE: This version replaces the one dated January 1995 entitled Meaning of "Mobile Home", "Residential Unit" and "Residential Complex" in the Context of Mini-homes, Park Model Trailers, Travel Trailers and Motor homes.

Legislative reference: Subsection 123(1) (definitions of "builder", "mobile home", "residential complex", "residential trailer park", "residential unit", "single unit residential complex", "trailer park") and sections 254, 254.1 and 256 of the Excise Tax Act; paragraph 7(a) of Part I of Schedule V to the Excise Tax Act, and subsection 41(1) of the New Harmonized Value-added Tax System Regulations No. 2 (definition of "single unit residential complex").

Note: All legislative references in this policy statement refer to the Excise Tax Act (the Act) unless otherwise indicated.

National coding system file number(s): 11870-1; 11950-1

Effective date: January 1, 1991

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.

This policy statement addresses the application of subparagraph 7(a)(i) of Part I of Schedule V to the Act in respect of mini-homes, park model trailers, and travel trailers and the availability of a GST/HST new housing rebate.

For purposes of this policy statement, reference to a "recreational unit" includes a mini-home, a park model trailer, a travel trailer or similar unit or vehicle designed primarily for travel and recreational use, and that has residential attributes similar to those of a mobile home, including plumbing, electrical/gas and heating facilities (for example, washroom and cooking facilities).

For purposes of this policy statement, a recreational unit does not include a folding camping trailer known as a pop-up or tent trailer, a camper van, a truck camper, a motorhome or similar unit or vehicle.

Subparagraph 7(a)(i) of Part I of Schedule V to the Act does not apply to a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement for continuous possession or use of the land for at least one month by an owner, lessee or person in occupation or possession of such units or vehicles.

If a recreational unit is located on a site in a "residential trailer park" as defined in subsection 123(1), reference should be made to paragraph 7(b) of Part I of Schedule V to the Act.

Subparagraph 7(a)(i) of Part I of Schedule V to the Act provides that a supply of land (other than a site in a residential trailer park) made by way of lease, licence or similar arrangement that provides for continuous possession or use of the land for at least one month is exempt if the supply is made to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to the land for the purpose of its use and enjoyment as a place of residence for individuals.

The determination of whether the supply of land (that is not a site in a residential trailer park) made by way of lease, licence or similar arrangement for continuous possession or use of the land for at least one month by an owner or lessee of a recreational unit is an exempt supply under subparagraph 7(a)(i) of Part I of Schedule V to the Act depends on whether the following three conditions are met:

  1. The recreational unit must be a residential unit for GST/HST purposes.
  2. The unit must be affixed to the land in the context of subparagraph7(a)(i) of Part I of Schedule V to the Act.
  3. The unit must be affixed to the land for the purpose of its use and enjoyment as a place of residence.

A recreational unit that meets the definition of residential unit, is affixed to land, and used as a place of residence for individuals is generally considered to be a "single unit residential complex" Footnote 1. As such, the sale of a previously occupied recreational unit, or the rental of a new or used recreational unit, that is a residential complex may be subject to the exempting provisions applicable to the supply of a residential complex.

This policy statement also examines the availability of a GST/HST new housing rebate in respect of the GST or federal part of the HST and a provincial new housing rebate in respect of the provincial part of the HST that may be payable on the purchase of a recreational unit.

Issue No. 1

Does a recreational unit meet the definition of "residential unit" in subsection 123(1)?

Decision

Generally, a recreational unit is not a residential unit. However, under limited circumstances, a recreational unit may be considered to be a "residential unit" as defined in subsection 123(1).

Discussion

In general, a recreational unit is not considered to be a "residential unit" within the definition of subsection 123(1) since it is generally designed for recreational use and does not generally possess the characteristics, including permanency, of units described in the definition.

The first part of the definition of "residential unit" provides that a residential unit means:

  1. "a detached house, semi-detached house, rowhouse unit, condominium unit, mobile home, floating home or apartment,
  2. 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
  3. any other similar premises..."

Generally, a recreational unit does not have the same characteristics as a house or a mobile home and is not normally permanently affixed to land in the same manner as a house (that is, installed on a permanent foundation). Therefore, a recreational unit would not generally be considered to be a residential unit. However, under limited circumstances, a recreational unit may be considered a similar premise under paragraph (c) of the definition of "residential unit". Sufficient modifications must be made to a recreational unit to add the necessary characteristics, including permanency, to establish that it is a similar premise.

Whether a particular recreational unit is sufficiently modified and affixed to land in the same manner as a house and considered to be a similar premise is a question of fact. The determination of whether a particular recreational unit may be considered to be a residential unit is made on a case-by-case basis. Factors that may indicate that a particular recreational unit is a residential unit include:

All relevant factors should be considered in determining whether a recreational unit has been significantly modified and affixed to land such that it possesses the necessary characteristics, including permanency, to establish that it is a similar premise and therefore a "residential unit" within the meaning of the definition. No one factor is more important than another and no single factor alone may be determinative of the issue.

If a recreational unit meets the definition of "residential unit", Issues No. 2 and No. 3 must be considered to determine if subparagraph 7(a)(i) of Part I of Schedule V to the Act applies. If a recreational unit does not meet the definition of "residential unit", the supply of the land is not exempt under subparagraph 7(a)(i) of Part I of Schedule V to the Act.

Issue No. 2

When is a recreational unit affixed to land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act?

Decision

A recreational unit that is a residential unit is considered to be affixed to land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act if it is installed or affixed in a permanent manner that is conducive to long-term residential use. This is the case where, for example, the recreational unit is bolted to sonotubes or a cement pad and connected, in a permanent way, to service facilities, such as municipal water and sewer system, well, septic system or an electrical power distribution system.

Discussion

Recreational units are not normally designed to be affixed to land in a permanent manner. If a recreational unit does not meet the definition of a "residential unit", there is no need to determine whether it is affixed to land as subparagraph 7(a)(i) of Part I of Schedule V to the Act will not apply.

Whether a particular recreational unit is affixed to land is a question of fact. The determination of whether a particular recreational unit, that is a residential unit, is affixed to land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act is made on a case-by-case basis.

In determining whether a particular recreational unit is affixed to the land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act, consideration is given to the method and degree of physical attachment of the unit to the land, as well as the purpose for which the unit has been attached to the land. The purpose of the affixation of a particular recreational unit to the land may be deduced by way of inference from all of the relevant circumstances. The question to be ascertained is whether the recreational unit has been attached to the land for better use of the unit (for example, to stabilize or secure the unit) for recreational purposes, or whether the affixation is to effect a permanent improvement to the real property, for use and enjoyment of the unit as a place of residence for individuals. For purposes of subparagraph 7(a)(i)of Part I of Schedule V to the Act, the degree of affixation of the recreational unit to the land must be sufficient to support long-term use of the unit as a place of residence.

Generally, a recreational unit that is a residential unit based on the factors listed under Issue no. 1 is considered to be affixed to the land where the degree of physical attachment of the unit with the subjacent land would support its use for residential purposes. All relevant factors should be considered in determining whether a recreational unit is sufficiently affixed to the land for this purpose. A recreational unit is affixed to the land if it is installed in a manner that is conducive to long-term residential use. This is the case where, for example, the recreational unit is bolted to sonotubes or a cement pad and is not merely resting/parked on the land or on any other surface, and it is connected, in a permanent way, to service facilities, such as municipal water and sewer system, well, septic system or electrical power distribution system.

Issue No. 3

Is a recreational unit for use and enjoyment as a place of residence?

Decision

A recreational unit that is a residential unit and is affixed to the land may be considered to be a place of residence based on the purpose for which it was affixed to the land, as well as the length of the stay during which the unit is occupied as a place of residence during the year; that is, the length of time and the frequency throughout the year that the individual occupying the unit is physically present and using the unit as a place of residence.

Discussion

The supply of land by way of lease, licence or similar arrangement, to an owner, lessee or person in occupation or possession of a residential unit that is or is to be affixed to land is an exempt supply under subparagraph 7(a)(i) of Part I of Schedule V to the Act, where the residential unit is for use and enjoyment as a place of residence for individuals. The meaning attributed to a "place of residence", as opposed to "lodging", is based on a determination of the purpose of the stay, the amount of time of the stay and the physical presence of the individual occupying the unit. If a recreational unit is an individual's primary place of residence, it will be considered to be for use and enjoyment of the individual as a place of residence.

While an individual may have only one primary place of residence, it is possible for an individual to have more than one place of residence. To be considered an individual's place of residence, the recreational unit should be used for purposes of habitation or dwelling, and cannot be used merely on a temporary basis for short-term stays. Whether a particular recreational unit is used as a place of residence is a question of fact and that determination is made on a case-by-case basis. Factors that may indicate that a recreational unit is used as an individual's place of residence include:

All relevant factors should be considered in determining whether a recreational unit is used as an individual's place of residence. No one factor is more important than another and no single factor alone may be determinative of the issue.

Issue No. 4

Is a GST/HST new housing rebate in respect of the GST or federal part of the HST, or a provincial new housing rebate in respect of the provincial part of the HST, available for the purchase of a recreational unit?

Decision

A GST/HST new housing rebate or provincial new housing rebate may be available in respect of a recreational unit that is a residential unit affixed to land for use as an individual's primary place of residence.

Discussion

A recreational unit that meets the definition of "residential unit", is affixed to land, and is used as a place of residence for individuals is generally considered to be a single unit residential complex for GST/HST purposes. As such, a GST/HST new housing rebate or provincial new housing rebate may be available in respect of an individual's purchase of a new recreational unit that is a single unit residential complex and is for use as the primary place of residence of the individual or a relation of the individual.

For GST/HST purposes, a vendor of a recreational unit that is a residential complex may be the "builder" Footnote 2 of the complex if the person acquires an interest in the unit and the land on which it is affixed before it has been occupied by an individual as a place of residence or lodging for the primary purpose of making a supply of the complex by way of sale. A vendor of a new recreational unit is not a builder if the vendor is not selling the unit together with the vendor's land on which it is affixed since a recreational unit does not generally meet the definition of a "mobile home" Footnote 3.

Where a new recreational unit is a single unit residential complex and both the land and the unit are purchased from a builder of the complex, the GST/HST new housing rebate in respect of the GST or federal part of the HST under section 254 may be available provided the eligibility and timing criteria for claiming the rebate are met. In addition, a provincial new housing rebate in respect of the provincial part of the HST may be available under section 256.21 and section 41 of the New Harmonized Value-added Tax System Regulations No. 2 provided that the eligibility and timing criteria for claiming this rebate are met. The Nova Scotia new housing rebate under subsection 254(2.1) is not available where the purchase and sale agreement was entered into after April 6, 2010 and both ownership and possession of the complex transfer, under the agreement, to the purchaser after June 30, 2010. For information on the Nova Scotia new housing rebate in this case, contact Service Nova Scotia and Municipal Relations.

Where a new recreational unit that is a single unit residential complex is purchased from a builder under an agreement and the land on which the unit is affixed is leased from the builder under the same agreement, the GST/HST new housing rebate in respect of the GST or federal part of the HST under section 254.1 may be available provided the eligibility and timing criteria for claiming the rebate are met. In addition, a provincial new housing rebate in respect of the provincial part of the HST may be available under section 256.21 and section 43 of the New Harmonized Value-added Tax System Regulations No. 2 provided that the eligibility and timing criteria for claiming this rebate are met. The Nova Scotia new housing rebate under subsection 254.1(2.1) is not available where the purchase and sale agreement was entered into after April 6, 2010 and both ownership and possession of the complex transfer, under the agreement, to the purchaser after June 30, 2010. For information on the Nova Scotia new housing rebate in this case, contact Service Nova Scotia and Municipal Relations.

Where an individual purchases a new or used recreational unit from a vendor for use as a place of residence, affixes it to land owned by the individual and makes the modifications necessary to add the necessary characteristics, including permanency, for it to be considered a similar premise for purposes of paragraph (c) of the definition of "residential unit", a GST/HST new housing rebate in respect of the GST or federal part of the HST under section 256 may be available provided the eligibility and timing criteria for claiming the rebate are met. This rebate may be available in respect of a portion of the GST/HST paid, if any, on the purchase of the new or used recreational unit, the land and any related costs incurred to affix the unit to the land. In addition, a provincial new housing rebate in respect of the provincial part of the HST may be available under section 256.21 and section 46 of the New Harmonized Value-added Tax System Regulations No. 2 provided that the eligibility and timing criteria for claiming this rebate are met. The Nova Scotia new housing rebate under subsection 256(2.1) is not available where the rebate application is filed after June 30, 2010. For information on the Nova Scotia new housing rebate in this case, contact Service Nova Scotia and Municipal Relations.

Examples

Example 1

Facts

1. In 1999, an individual purchased a park model trailer featuring a separate bedroom, kitchen, bathroom and living room. The trailer is not a "mobile home" as defined in subsection 123(1).

2. The trailer was trucked to a site in a "trailer park" Footnote 4. The trailer park is not a "residential trailer park" as defined in subsection 123(1). However, a certain percentage of the sites in the trailer park are dedicated to long-term leasing arrangements. Access to and use of these sites is permitted throughout the year.

3. Since 1999, the individual has lived in the trailer for nine months a year and has spent winters in a house that the individual owns in Toronto. On occasion, the individual goes to Florida for the winter.

4. The trailer was installed on the site as follows:

  • concrete strip footings were poured;
  • the trailer was placed and levelled on the footings;
  • the wheels were removed and the trailer was bolted to the concrete footings;
  • a skirt was installed around the foundation;
  • the trailer was connected to underground municipal sewer and water services, a hydro meter, and underground television and telephone services;
  • a deck and stairs were constructed to provide access to the trailer; and
  • landscaping and a driveway were added.

5. The individual pays an annual fee of $3,500 for the use of the site year-round. This fee covers property taxes that relate to the trailer and the site, water and sewer charges, snow ploughing, garbage pick up and site maintenance.

6. The terms of the lease do not restrict the use of the site to seasonal/recreational use only. The site may be used for residential purposes year-round.

7. The individual intends to use the trailer as a residence indefinitely and has no intention to move the trailer from the site.

Decisions

1. The trailer is a residential unit for GST/HST purposes.

2. For purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act, this trailer is affixed to the land onwhich it is situated for the purpose of its use and enjoyment as a place of residence for the individual. As such, the supply of the land made by way of lease to the individual is exempt under subparagraph 7(a)(i) of Part I of Schedule V to the Act.

Rationale

The trailer is affixed to land and sufficiently modified to add the necessary characteristics, including permanency, such that the trailer is considered to be a similar premise for purposes of paragraph (c) of the definition of "residential unit". The trailer is occupied and has been occupied for several years as the individual's primary place of residence, and is bolted to concrete footings. The trailer is also connected year-round in a permanent manner to underground municipal sewer and water services, a hydro meter and underground telephone and cable services. In addition, the removal of this trailer's wheels, the addition of skirting, a deck, stairs and a driveway are also indicators of permanency which supports the long-term residential use of the trailer.

Given that the trailer is a residential unit and is attached to the land on concrete footings, connected year-round to underground municipal sewer and water services, a hydro meter and underground telephone and cable services in a permanent manner, the trailer is considered to be affixed to the land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act.

The fact that the individual spends the winters in Toronto, or goes away to Florida for the winter, does not preclude the trailer from being considered as a place of residence of the individual. The following facts support a finding that the trailer is a place of residence of the individual:

  • the individual has resided in the trailer for nine months at a time over several years,
  • the site on which the trailer is situated is subject to a long-term lease arrangement, and
  • the trailer park does not restrict the individual from residing at the site year-round.

Example 2

Facts

1. An individual has entered into a two-year lease for the use of a site in a trailer park on which the individual has placed a travel trailer. The trailer park is not a "residential trailer park" and the operator is not a "public service body" within the meaning of those terms in subsection 123(1).

2. Under the terms of the lease agreement, the individual pays a yearly fee for the use of the site. The travel trailer may remain on the site year-round or may be removed for the winter months when the trailer park is non-operational.

3. The undercarriage and wheels have remained intact, and the travel trailer is secured to the ground with hurricane straps. The travel trailer has washroom and cooking facilities. It is connected to water, sewer and electrical facilities; however, the water supply to the park trailers is shut off during the winter months to prevent freezing of the pipes. The travel trailer is not winterized and is not suitable for cold weather habitation.

4. The individual occupies the travel trailer during the months of July and August, and occasionally during long weekends from May to October.

Decisions

1. The travel trailer is not a residential unit for GST/HST purposes.

2. The supply of the site made by way of lease is a taxable supply.

Rationale

While the travel trailer may be suitable for limited seasonal habitation and is to some degree affixed to the land, it is being used for short-term recreational purposes. The travel trailer can easily be removed from the site given the limited degree of physical attachment. The fact that the undercarriage and wheels remain intact indicates that the travel trailer is not intended to be affixed permanently. Although the lease agreement provides for a two-year term and the individual is free to leave the travel trailer on site throughout the year, the site is not suitable for occupancy year-round given that the water supply is not available during the winter months. As such, in these circumstances, the travel trailer is not sufficiently modified and affixed to land to add the necessary characteristics, including permanency, for the travel trailer to be considered a similar premise for purposes of paragraph (c) of the definition of residential unit.

Since the travel trailer is not a residential unit, subparagraph 7(a)(i) of Part I of Schedule V to the Act does not apply to the supply of the site. Given that no other exempting provision applies, the supply of the site made by way of lease is subject to GST/HST.

Example 3

Facts

1. Trailer Park Inc. owns and operates a trailer park in Manitoba that contains 150 sites. The sites are occupied by lessees who have placed various recreational vehicles on their sites, such as pop-up tent trailers, fifth-wheel trailers, travel trailers and motorhomes designed for recreational use. The recreational vehicles are not manufactured or designed for winter habitation and none qualify as a mobile home. The trailer park is not a "residential trailer park" and Trailer Park Inc. is not a "public service body" within the meaning of those terms in subsection 123(1).

2. The lease agreements with Trailer Park Inc. indicate that lessees may occupy a particular site from May to October annually, and specify that the sites may not be used for residential purposes. Trailer Park Inc. strictly enforces the provisions of the lease agreements.

3. The lease agreements further specify that any additions or improvements to the recreational vehicles and their sites must be approved by management and undertaken so as not to impede the expeditious vacating of the sites and the removal of the lessees' property.

4. Some of the recreational vehicles have skirting, porches and car ports. Some of the recreational vehicles have their undercarriage intact, including tow tongues and wheels, while others do not.

5. From May to October, the recreational vehicles are connected to sewer, water and electrical facilities but are not otherwise attached to their sites.

Decisions

1. The recreational vehicles are not residential units for GST/HST purposes.

2. The supply of a site in the trailer park made by Trailer Park Inc., by way of lease, is a taxable supply.

Rationale

Recreational vehicles such as pop-up tent trailers, fifth-wheel trailers and motorhomes are not residential units for GST/HST purposes and the rental of sites for such vehicles are not exempt under subparagraph 7(a)(i) of Part I of Schedule V to the Act.

Some of the recreational vehicles are, to some degree, affixed to the land on a limited and temporary basis and are being used for short-term recreational purposes. The terms of the lease agreements support a seasonal use or transitory purpose by restricting the use of the sites from May to October for non-residential purposes only and by requiring that the recreational vehicles be maintained is such a way as to facilitate their expeditious removal from the sites. As such, the recreational vehicles cannot be sufficiently modified and affixed to land to add the necessary characteristics, including permanency, for the recreational vehicles to be considered similar premises for purposes of paragraph (c) of the definition of "residential unit". Even if a particular recreational vehicle has been modified to add a room, screened porch and/or car port, the recreational vehicle is not a residential unit (that is, the vehicle is not a similar premise for purposes of paragraph (c) of the definition of "residential unit") since the recreational vehicle cannot be connected in a permanent way for year-round water, sewer, electrical services and cannot be used year-round as the lease agreement does not permit such use.

Since the recreational vehicles are not residential units, that is, the vehicles do not possess the necessary characteristics, for example the vehicles are not affixed to the land in a permanent manner, subparagraph 7(a)(i) of Part I of Schedule V to the Act does not apply to the supplies of the sites. Given that no other exempting provision applies, the supply of a site made by way of lease is subject to GST/HST.

Example 4

Facts

1. An individual leases a lakefront lot and plans to put a mini-home on the lot. The lease is for a one-year term, renewable on an annual basis at the lessee's option. To renew the lease, the individual must, by November of each year, make a non-refundable lump-sum payment for the next calendar year.

2. The lease agreement requires that any structure that is to be installed on the lot must be designed and constructed in such a manner that it may be removed from the land in the event the lessee opts not to renew the lease. The lease agreement specifies that the total floor space of the structure cannot exceed 650 square feet.

3. In June of the second year, the individual purchases an unassembled mini-home consisting of a series of two-dimensional, factory-produced panels. The panels are packaged in knockdown condition and are delivered to the lot along with all other materials and components necessary to complete its assembly.

4. The individual assembles the mini-home on the lot. The mini-home is similar in structure and function to ahouse, including plumbing, electrical and heating facilities. Washroom and cooking facilities are included in the mini-home.

5. In compliance with the terms of the lease agreement requiring the structure to be removed should the lessee not renew the lease, the mini-home is set on concrete blocks. The mini-home may be removed from the site only with the use of specialized heavy equipment/machinery and skilled operators, and transported by means of a flatbed truck specially designed to move houses. Special oversize permits would be required for its transportation.

6. The mini-home is connected in a permanent manner to sewer, water and electrical facilities; that is, the mini-home cannot be readily disconnected from these services. The sewer and water pipes are underground and connected directly to the plumbing for the mini-home.

7. The individual has a telephone listing at the location.

8. The individual intends to use the mini-home as a secondary residence year-round on weekends and holidays for an indefinite period. The mini-home is habitable throughout the year.

Decisions

1. Once assembled, installed on concrete blocks and connected for year-round use in a permanent manner to the utilities, the mini-home is a residential unit for GST/HST purposes.

2. The supply of the lakefront lot made by way of lease is a taxable supply at the time the individual first enters into the lease agreement and at the time the individual firsts renews the lease.

3. For purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act, the individual is considered to be in possession or occupation of a residential unit once the assembly and installation of the mini-home on the land is completed. The supply of the lakefront lot made by way of lease is exempt under subparagraph 7(a)(i) of Part I of Schedule V to the Act at the beginning of the lease interval during which the individual is in possession or occupation of a residential unit; that is, at the beginning of the third year of the lease.

4. The individual is not entitled to claim a GST/HST new housing rebate or a provincial new housing rebate in respect of the GST/HST paid on the purchase and installation of the mini-home.

Rationale

Once assembled, installed on concrete blocks and connected year-round in a permanent manner to sewer, water and electrical facilities, the mini-home possesses the necessary characteristics, including permanency, such that it is considered to be a similar premise for purposes of paragraph (c) of the definition of "residential unit". The mini-home possesses residential attributes similar to a house, is designed for year-round use, is connected to utilities in a permanent manner and is installed on concrete blocks in a manner that is conducive to long-term residential use. The mini-home is used by the individual as a secondary place of residence year-round, the land is subject to a long-term lease and the mini-home is not intended to be moved in the near future.

Upon entering into the lease agreement for the lakefront lot and at the time the lease is first renewed, the individual is not in possession or occupation of a residential unit and it has not been clearly established, at that time, that the individual will affix a residential unit to the lot within a reasonable period of time. For example, there is no requirement under the lease agreement for the individual to affix a residential unit to the lot. As such, subparagraph 7(a)(i) of Part I of Schedule V to the Act does not apply to the supply of the lakefront lot made by way of lease during the first two years. Given that no other exempting provision applies, the supply of the lakefront lot made by way of lease is subject to GST/HST during these first two years.

Provided that the individual completes the assembly of the mini-home on the land, such that the individual is considered to be in possession or occupation of a residential unit at the beginning of the third year, the supply of the lakefront lot for the third year is exempt under subparagraph 7(a)(i) of Part I of Schedule V to the Act. Footnote 5

While the mini-home may be removed from the site in the future, the individual intends to use it as a secondary place of residence indefinitely. The mini-home is immobile unless the individual undertakes the significant initiative and expense of hiring skilled house movers and specialized equipment for its removal and transportation. In addition, the plumbing is directly connected, in a permanent manner, to underground water and sewer pipes. As such, the mini-home is considered to be affixed to the land for purposes of subparagraph 7(a)(i) of Part I of Schedule V to the Act.

The mini-home is also used as a place of residence of the individual given that the lease agreement allows the individual to renew the lease for the foreseeable future, it is connected to utilities year-round, it is suitable for year-round habitation and the individual maintains a telephone listing at this location.

The individual is not entitled to claim a GST/HST new housing rebate or provincial new housing rebate in respect of the GST/HST paid on the purchase of the mini-home since the conditions for claiming a rebate are not met (for example, the mini-home is used by the individual as a secondary residence, it is not the primary place of residence of the individual or a relation).

Example 5

Facts

1. An individual purchases a lakefront lot. The individual paid the GST/HST payable in respect of the purchase.

2. The individual purchases an unassembled mini-home consisting of a series of two-dimensional, factory-produced panels. The panels are packaged in knockdown condition and are delivered to the lot along with all other materials and components necessary to complete its assembly. The individual paid the GST/HST payable in respect of this purchase.

3. The individual assembles the mini-home on the lot. It is similar in structure and function to ahouse, including plumbing, electrical and heating facilities. Washroom and cooking facilities are included inthe mini-home.

4. The mini-home is set on concrete blocks. It may be removed from the site only with the use of specialized heavy equipment/machinery and skilled operators, and transported by means of a flatbed truck specially designed to move houses. Special oversize permits would be required for its transportation.

5. The mini-home is connected in a permanent manner to sewer, water and electrical facilities; that is, the mini-home cannot be readily disconnected from these services. The sewer and water pipes are underground and connected directly to the plumbing for the mini-home.

6. The individual has a telephone listing at the location.

7. The mini-home is the individual's primary place of residence and it is habitable throughout the year.

Decisions

1. Once assembled, installed on concrete blocks and connected for year-round use in a permanent manner to the utilities, the mini-home is a residential unit and a single unit residential complex for GST/HST purposes.

2. The individual is entitled to claim a GST/HST new housing rebate under section 256 in respect of the GST, or federal part of the HST, paid on the purchase of the lakefront lot, the mini-home and related installation/construction costs provided that all of the eligibility and timing criteria for claiming the rebate are met. If the lot is located in a province that provides a new housing rebate, the individual would be entitled to claim the provincial new housing rebate in respect of the provincial part of the HST paid on the purchase of the lakefront lot, the mini-home and related installation/construction costs provided that all of the eligibility and timing criteria for claiming the rebate are met.

Rationale

Once assembled, installed on concrete blocks and connected year-round in a permanent manner to sewer, water and electrical facilities, the mini-home possesses the necessary characteristics, including permanency, such that it is considered to be a similar premise for purposes of paragraph (c) of the definition of "residential unit". As such, the mini-home is also a single unit residential complex. It possesses residential attributes similar to a house, is designed for year-round use, is connected to utilities in a permanent manner and is installed on concrete blocks in a manner that is conducive to long-term residential use. It is used by the individual as a primary place of residence and it is not intended to be moved in the near future. In addition, the plumbing is directly connected, in a permanent manner, to underground water and sewer pipes.

Since the individual purchased a new mini-home, assembled it and affixed it to land owned by the individual, the individual is considered to have constructed a single unit residential complex. As such, the individual is entitled to claim a GST/HST new housing rebate in accordance with section 256 in respect of the GST, or federal part of the HST, paid on the purchase of the lakefront lot, mini-home and related installation/construction costs provided that the eligibility and timing criteria for claiming the rebate are met. If the lot is located in a province that provides a new housing rebate, the individual would be entitled to claim the provincial new housing rebate in respect of the provincial part of the HST paid on the purchase of the lakefront lot, the mini-home and related installation/construction costs provided that all of the eligibility and timing criteria for claiming the rebate are met.

If the lakefront lot is situated in Nova Scotia, the Nova Scotia new housing rebate under subsection 256(2.1) is not available where the rebate application is filed after June 30, 2010. For information on the Nova Scotia new housing rebate in this case, contact Service Nova Scotia and Municipal Relations.

Example 6

Facts

1. A person is in the business of buying and selling previously occupied park model trailers and travel trailers.

2. The person is registered for GST/HST purposes.

3. The person does not purchase the land on which the trailers were affixed by their previous owners.

4. The person transports the newly acquired trailers to its retail lot where the trailers remain parked until they are sold.

5. The person makes only minor renovations to the trailers prior to their sale and does not sell or lease any land on which a trailer may be affixed.

Decisions

1. The trailers on the retail lot are not residential units for GST/HST purposes.

2. The supply of a previously occupied trailer by the person is a taxable supply. The person is required to charge and collect the GST/HST payable on the sale of the previously occupied trailer.

Rationale

Although a trailer may have been a residential unit when affixed to land by a previous owner, once it is no longer affixed to land and parked on the retail lot, it no longer possesses the necessary characteristics to be considered similar premise for purposes of paragraph (c) of the definition of "residential unit". As such, the trailer is not a residential unit.

The sale of a previously occupied park model trailer or travel trailer made in the course of a commercial activity of selling such trailers is subject to GST/HST when it is sold by a person who is a GST/HST registrant. Where the trailer is sold by a non-registrant, such as a small supplier, the non-registrant is not required to charge and collect GST/HST in respect of the sale.

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