CRA indicates that a students residence, unlike a hotel, would constitute a rental property for purposes of the capital gains exemption in Art. 13(4) of the Canada-Germany Treaty

A single-purpose Canadian-resident corporation (Canco) owned by German residents (each with a “substantial” - at least 10% - shareholding) wholly owned Opco, which provided long-term (12-month) furnished accommodation to post-secondary students for monthly fees which included ancillary services such as for utilities, internet access, gym, a games room, lounge and patio, barbecue area, concierge service, security, a social coordinator, mail service, ice cream shop, 24-hour hotline, pancake breakfasts, and movie nights.

CRA indicated that the immovable property would not qualify as "property (other than rental property) in which the business … is carried on" for purposes of the capital gains exemption in Art. 13(4) of the Canada-Germany Treaty. It noted that there were significant differences between a student housing operation and hotels, which made the former a rental property, and stated:

Even considering the [above] services … the structure of student housing operations have the traits of a rental property in light of the use that the students make of the property as well as the purpose and the nature of the arrangement between the parties.

Neal Armstrong. Summary of 17 November 2025 External T.I. 2020-0854261E5 under Treaties – Income Tax Conventions – Art. 13.