How do paras. (b) and (d) of the “builder” definition apply to a corporation that acquired one or more pre-build residential complexes that it in fact leased it to a person for personal use?
After referring to the para. (h) exclusion and noting that it applies to para. (b) but not para. (d), CRA stated:
Generally, in order for a corporation to be a builder of a residential complex under subparagraph (b)(ii), the interest that the corporation acquires must be more than a right to purchase the complex (or an interest in it) from a builder of the complex. For example … a corporation could be a builder of a residential complex under subparagraph (b)(ii) where the corporation is a developer-landlord who purchases an apartment building that is under construction, and finishes the construction, for the primary purpose of leasing the apartment units to tenants. Conversely, where a corporation is a purchaser-landlord who acquires a right to purchase an apartment building that is under construction for the primary purpose of leasing the completed apartment building to another person under a head lease (or for the primary purpose of leasing the completed apartment units to tenants) the corporation would not be a builder of the apartment building under subparagraph (b)(ii) because of the exclusion in paragraph (h); one would have to determine whether the corporation could be a builder of the apartment building under paragraph (d). [emphasis in original] …
[A] corporation that is a purchaser-landlord who acquires a right to purchase an apartment building that is under construction for the primary purpose of leasing the completed apartment building to another person under a head lease (or for the primary purpose of leasing the completed apartment units to tenants) would not be a paragraph (b) builder because of the exclusion in paragraph (h). In our view, it would be more appropriate to characterize the corporation’s acquisition of the interest as falling within paragraph (d). For example, a corporation could be a builder of a residential complex under paragraph (d) where the corporation is a purchaser-landlord who acquires a right to purchase an apartment building, that has never been occupied by an individual, for the primary purpose of leasing the apartment building to another person under a head lease. Conversely, if the corporation is a purchaser-landlord who acquires said right for the primary purpose of leasing the apartment units to tenants, the corporation would not be a builder of the apartment building for GST/HST purposes because of the exclusion in subparagraph (d)(iv).
