When it comes to taxation, every
word matters. Take self-supply for example. It might mean that demand and
supply originate from the same source. But it’s not that simple when it stands
to pertain to builders. It might seem like a simple, easy to follow concept but
there are certain rules that connect this term to GST/HST New Residential
Rental Property (NRRP) Rebate eligibility.
Personal and corporate income tax experts at
ZRPC, Scarborough, thus explain the criteria that defines self-supply
and how it relates to GST/HST NRRP rebate.
What Self Supply means here?
In the context of a builder,
self-supply means when a builder constructs a residential complex, multiple
unit or not, or builds an addition to a multiple unit residential complex, both
intended to be leased or rented, it means that builder has made a self-supply
of that construction. If you’re that builder, you’re eligible to claim GST/HST
NRRP rebate.
When a builder makes a taxable
sale of real property and buys it immediately, he/she is fulfilling the
criteria of self-supply. A builder of a newly constructed or substantially
renovated residential complex, an addition to a multiple unit residential
complex, a residential complex carved out of a non-residential unit, then
you’ve made a self-supply if:
- · You lease that constructed/renovated/converted property to an individual for long term residential use and that person is the first occupant.
- · You are the first occupant of that residential complex/addition to a multiple residential complex, for residential purposes.
- · You consider exempt sale of the building part of complex and exempt long term lease of the land part of complex under a single agreement.
- · You lease the land to a person who attaches a residential unit, like a site on lease in a residential trailer park.
A builder who is considered to
have made a self-supply by satisfying the above mentioned criteria, is also
considered to have paid and collected GST/HST, calculated on the current and
fair market value of the property from the date of the self-supply. If you’re
that builder, you’re required to show the GST/HST transaction while filing your
GST/HST return. It doesn’t matter if you’re registered for GST/HST or not. The
NRRP rebate amount will solely depend on the GST/HST amount you’re supposed to
have paid on the self-supply.
- You’ve made a self-supply and are eligible for GST/HST NRRP rebate on the following dates:
- · The day of the completion of construction or substantial renovation.
·
The very day you occupy the said property for
residential purpose or you give possession or use of the complex/unit in the
complex/addition, under a lease to a lessee or under some sort of license of
occupancy for residential purpose (it’s advisable to determine the fair market
value of property at the very moment of occupancy as It helps to clearly define
the time of occurrence of self-supply).
No comments:
Post a Comment