New Harmonized Value-added Tax System Regulations, No. 2 — 52
Transfer of residential condominium unit after June 2010 52 (1) If (a) a particular taxable supply by way of sale of a residential condominium unit 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 unit is transferred to the person under the agreement before July, 1, 2010, and (c) possession of the unit is transferred to the person 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, the original vendor is deemed to have made another taxable supply in respect of the unit and to have collected, at the earlier of the time ownership of the unit is transferred to the person and the time possession of the unit is transferred to the person under the agreement, 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 unit at the time the agreement is entered into if the construction of the unit or, in the case of a substantial renovation of the unit, the last substantial renovation of the unit, were substantially completed at that time, the consideration is deemed to be equal to that amount. (1.1) [Repealed, SOR/2012-191, s. 41] Assignment of agreement (2) The rules in paragraphs (1)(d) to (f) apply in respect of an agreement described in paragraph (1)(a) in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 residential condominium unit if the following circumstances apply: (a) the agreement is assigned to a particular person; (b) neither ownership nor possession of the unit is transferred to any person under the agreement before July 1, 2010; (c) possession of the unit is transferred to the particular person 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 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 unit 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 unit 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 unit. 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 residential condominium unit to a particular person under an agreement evidenced in writing and the first reseller is the recipient of a previous supply of the unit that 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 unit primarily for the purpose of making a taxable supply by way of sale of the unit; (b) possession of the unit is transferred to the first reseller after the construction or last substantial renovation of the unit is substantially completed; (c) the original vendor of the unit and the first reseller deal with each other at arm’s length and are not associated with each other; (d) either (i) the fi