New Harmonized Value-added Tax System Regulations, No. 2 — 58.06
Transfer of condominium complex after March 2013 58.06 (1) If (a) a particular taxable supply by way of sale of a condominium complex is made in Prince Edward Island 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 November 8, 2012, (b) neither ownership nor possession of the complex is transferred to the person under the agreement before April 1, 2013, and (c) at any time on or after April 1, 2013, 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 4.5% 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 April 1, 2013; (c) at any time on or after April 1, 2013, 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”. Input tax credit — resale (3) If a particular person makes a particular taxable supply by way of sale of a condominium complex, or any residential condominium unit located in a condominium complex, to another person under an agreement evidenced in writing, the particular person 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) and tax under subsection 165(2) of the Act is payable in respect of the particular supply, for the purposes of determining an input tax credit of the particular person and for the purposes of section 58.07, (a) if the particular supply is a supply of a condominium complex, the particular person is deemed to have received another taxable supply in respect of the complex and to have paid, at the time possession of the complex is transferred to the other person, tax in respect of the other supply equal to 4.5% of the consider