New Harmonized Value-added Tax System Regulations, No. 2 — 53
Transfer of condominium complex after June 2010 53 (1) If (a) a particular taxable supply by way of sale of a condominium complex is made in a specified province 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 the qualifying date for the specified province, (b) neither ownership nor possession of the complex is transferred to the person under the agreement before July 1, 2010, and (c) at any time on or after July 1, 2010, ownership of the complex is transferred to the person under the agreement or the complex is registered as a condominium, 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 complex and to have collected, on the earlier of the day ownership of the complex is transferred to the person under the agreement and the day that is sixty days after the day on which the complex is registered as a condominium, tax under Division II of Part IX of the Act in respect of the other supply equal to 2% 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 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. 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 condominium complex if the following circumstances apply: (a) the agreement is assigned to a particular person; (b) neither ownership nor possession of the complex is transferred to any person under the agreement before July 1, 2010; (c) at any time on or after July 1, 2010, ownership of the complex is transferred to the particular person or the complex is registered as a condominium; 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 complex 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 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 “person” in paragraph (1)(e) is to be read as a reference to the “particular person”. First reseller (3) If a person (in this section referred to as the “first reseller”) makes a taxable supply by way of sale (in this section referred to as the “first resale”) of a condominium complex, or any residential condominium unit located in a condominium complex, to a particular person under an agreement evidenced in writing and the first reseller 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), no tax is payable under subsection 165(2) of the Act in respect of the first resale, if the following conditions are satisfied: (a) the first reseller acquires the complex primarily for the purpose of making a taxable supply by way of sale of the complex or unit, as the case may be; (b) possession of the complex is transferred to the first reseller after the construction or last substantial renovation of the complex is substa