New Harmonized Value-added Tax System Regulations, No. 2 — 51
Transfer of single unit residential complex after June 2010 51 (1) If (a) a particular taxable supply by way of sale of a single unit residential complex (other than a floating home or a mobile home) is made in a specified province to an individual under an agreement, evidenced in writing, entered into between the supplier (in this section referred to as the “original vendor”) and the individual on or before the qualifying date for the specified province, (b) neither ownership nor possession of the complex is transferred to the individual under the agreement before July 1, 2010, and (c) possession of the complex is transferred to the individual under the agreement at any time on or after July 1, 2010, 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, if immediately after June 2010, the construction or last substantial renovation of the complex is less than 90% completed, the original vendor is deemed to have made another taxable supply in respect of the complex and to have collected, at the earlier of the time ownership of the complex is transferred to the individual and the time possession of the complex is transferred to the individual under the agreement, tax under Division II of Part IX of the Act in respect of the other supply equal to (i) 2% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after June 2010, less than 10% completed, (ii) 1.5% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after June 2010, 10% or more but less than 25% completed, (iii) 1% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after June 2010, 25% or more but less than 50% completed, (iv) 0.5% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after June 2010, 50% or more but less than 75% completed, and (v) 0.2% of the consideration for the particular supply if the construction or last substantial renovation of the complex is, immediately after June 2010, 75% or more but less than 90% completed, (f) for the purposes of paragraph (e), 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, and (g) for the purposes of Division 4, the complex is deemed not to be a specified single unit residential complex. Assignment of agreement (2) The rules in paragraphs (1)(d) to (g) apply in respect of an agreement described in paragraph (1)(a) in respect of a single unit residential complex (other than a floating home or a mobile home) if the following circumstances apply: (a) the agreement is assigned to a particular individual; (b) neither ownership nor possession of the complex is transferred to any individual under the agreement before July 1, 2010; (c) possession of the complex is transferred to the particular individual under the agreement at any time on or after July 1, 2010; and (d) the following conditions are met in respect of the assignment of the agreement to the particular individual and in respect of every other assignment of the agreement made prior to the assignment to the particular individual: (i) a novation of the agreement has not occurred, (ii) the original vendor of the complex and the individual who 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 an