Construction or Renovation of Residential Complexes

If you build or substantially renovate a residential complex or if you build an addition to a multiple-unit residential complex, in order to lease it (in whole or in part) or to use it as your residence, you are, as a builder (This link will open a new window), considered to be the seller and the recipient of the residential complex. You are therefore deemed to have made a self-supply.

Self-supply of a residential complex

The self-supply rules apply only to residential complexes. If you meet the above-mentioned conditions, you must, as a rule, remit the GST and the QST calculated on the fair market value (This link will open a new window) (FMV) of the residential complex or the addition and deemed to have been collected. You must remit this amount when filing your GST/HST and QST returns.

If you are not registered for the GHT/HST or QST, you must enclose your tax remittance with a completed copy of form FP-505.2-V, GST/HST and QST Return for the Self-Supply of a Residential Complex.

The subsequent sale of a residential complex is usually tax-exempt.

Note

The self-supply rules do not apply in certain situations.

Payment deadline

Single-unit residential complexes, residential units held in co-ownership and multiple-unit residential complexes

The self-supply rules apply if you build or substantially renovate a single-unit residential complex, a residential unit held in co-ownership or a multiple-unit residential complex.

You can claim an input tax credit (ITC) and an input tax refund (ITR) for the GST and the QST paid on the construction or substantial renovation of the residential complex or unit. You can also claim an ITC and an ITR for the GST and the QST not recovered on the acquisition of the land that is part of the residential complex. If you are not a GST and QST registrant, you can claim a rebate.

Type of residential complex The rules apply if Payment of the GST and the QST

Single-unit residential complex

Residential unit held in co-ownership

Multiple-unit residential complex

  • You are a builder and you lease the residential complex or unit to an individual for use as a place of residence.
  • You are a builder who is an individual and you occupy the residential complex or unit as your place of residence.

On the later of:

  • the date on which possession of the residential complex is transferred, or on which the builder occupies the complex;
  • the date on which the work is substantially completed.

Important: This deadline is the same regardless of whether you claimed rebates to reduce the taxes payable. 

Additions to multiple-unit residential complexes

The self-supply rules also apply to the construction of an addition to a multiple-unit residential complex. For example, if you add a new floor or wing to a multiple-unit residential complex and you lease a residential unit in the addition, you are considered to be a builder who has sold and acquired the addition at its fair market value (This link will open a new window) (FMV).

However, if the whole residential complex is sold before the addition is occupied for the first time, the self-supply rules do not apply to the addition. In this situation, the addition and the residential complex are considered to be two separate residential complexes. Accordingly, the sale of the addition is taxable and the sale of the residential complex, excluding the addition, is tax-exempt.

Type of residential complex The rules apply if Payment of the GST and the QST

Multiple-unit residential complex

  • You are the builder and you lease a residential unit in the addition to an individual for use as a place of residence.
  • You are a builder who is an individual and you occupy a residential unit in the addition as your place of residence.

On the later of:

  • the date on which possession of the addition is transferred, or on which a residential unit in the addition is occupied;
  • the date on which the work is substantially completed.

Important: This deadline is the same regardless of whether you claimed rebates to reduce the taxes payable. 

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