- The Tax Court of Canada allowed an appeal from a $126,100 GST/HST assessment on the sale of a Toronto property that had been mostly demolished, abandoned mid-renovation, and sold “as is” at a loss.
- The Court held the taxpayer was not a “builder” under the Excise Tax Act because the project never progressed beyond demolition, so there was no “substantial renovation”; the sale was therefore treated as an exempt supply of a residential complex and no HST was payable.
- The article argues the Court focused on the wrong issue: older Tax Court cases suggest a gutted or uninhabitable structure may cease to be a “residential complex” altogether, which would point to a taxable sale rather than an exempt one.
- The CRA had assessed HST on the full purchase price and also challenged the treatment of input tax credits claimed during ownership.
Source: goodservicetax.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
