18 January 1995 Headquarters Letter No. 11634-2

After referring with aproval to Lubbock Fine, CRA stated that "a lease surrender is a sale" so that a lease surrender payment would constitute consideration for a sale of "real property" as defined in s. 123(1). The portion of the surrender price that, in fact, was a return of prepaid rent would not so qualify.

Before going on to find that a lease surrender by the tenant was a "sale" of real property, CRA stated:

[F]or GST purposes a leasehold interest in land is real property, unlike the position at common law, by virtue of both the definition of real property and subsection 136(1).