28 February 2019 CBA Roundtable, Q.11

Where there is a joint venture to construct a multiple unit residential complex (MURC), is the “operator” of the joint venture who has a beneficial interest in the project and who has been appointed pursuant to s. 273 entitled to: (i) report and remit the GST/HST that is deemed under s. 191(3) of the ETA to have been collected by the builder; and (ii) claim any eligible new residential rental property rebates that are available under s. 256.2? CRA responded:

Where the operator has a beneficial ownership interest in the real property on which the MURC is constructed, it will likely meet the definition of “builder” if the operator carries on, or engages another person to carry on for the operator, the construction of the MURC. …

Furthermore, if the operator meets the definition of “builder,” then the operator is within the deeming rules under subsection 191(3) and will be required to report and remit the GST/HST that is deemed under subsection 191(3) to have been collected by the builder. …

Even if the operator is a “builder” that is required under subsection 191(3) to report and remit the tax on the self-supply of the MURC, it may not necessarily be entitled to a rebate under subsection 256.2(3) if the residential unit does not meet the definition of a “qualifying residential unit” or if any of the other conditions under section 256.2 for claiming the rebate are not met.

Provided that the designated operator for a joint venture to construct a multiple unit residential complex has a beneficial interest in the project, so that it can qualify as the project “builder,” CRA was generally amenable to the proposition that such operator is the one to claim the new residential rental property rebate under s. 256.2(3) when there is a deemed self-supply by it under s. 191(3) (generally, at the time of first occupancy). As a preliminary matter it stated:

Before determining whether the deeming rules in subsection 191(3) apply to an operator who has made a joint venture election under section 273, the operator must first meet the definition of “builder” in subsection 123(1). Where the operator has a beneficial ownership interest in the real property on which the MURC is constructed, it will likely meet the definition of “builder” if the operator carries on, or engages another person to carry on for the operator, the construction of the MURC. It is important to note that more than one person can meet the definition of “builder” for GST/HST purposes. For example, a co-venturer may have an interest in the real property and also meet the definition of “builder”.