The VAT Treatment of Real and Immovable Property in Canada

THE VAT TREATMENT OF REAL AND IMMOVABLE PROPERTY OF CANADA, pp. 83-121, Robert F. van Brederode, ed., Immovable Property under VAT: A Comparative Global Analysis, 2011

39 Pages Posted: 28 Apr 2010 Last revised: 28 May 2011

See all articles by Benjamin Alarie

Benjamin Alarie

University of Toronto - Faculty of Law

Pierre-Pascal Gendron

Humber Institute of Technology & Advanced Learning

Date Written: April 28, 2010

Abstract

Despite its complexity and the harsh reception the Canadian Goods and Services Tax (GST/HST) was greeted with at its inception in the early 1990s, the story emerging from Canada’s value-added tax (VAT) experience is mostly a happy one. Indeed, a majority of the provinces will soon have replaced their retail sales taxes (RSTs) with harmonized VAT systems – a positive sign of acceptance and the recognition that VATs are economically superior to RSTs and that having parallel but incompatible – in practice, that is – sales tax systems makes little sense from the perspective of economic efficiency and compliance and administrative costs. This paper explains that the tax treatment of real property under Canada’s VAT systems is far from being straightforward. Nevertheless, this paper attempts to summarize the most important features of the design of the systems and their administration, as well as identify the legal issues that most frequently land in the Tax Court of Canada (and beyond). If nothing else, the complexity of the relevant Canadian law demonstrates and underscores the inestimable value of comparative work in this area, particularly to policymakers in jurisdictions considering imposing VAT on real property transactions.

Keywords: VAT, tax, sales taxes, value-added taxation, real estate, real property, immovable property

Suggested Citation

Alarie, Benjamin and Gendron, Pierre-Pascal, The VAT Treatment of Real and Immovable Property in Canada (April 28, 2010). THE VAT TREATMENT OF REAL AND IMMOVABLE PROPERTY OF CANADA, pp. 83-121, Robert F. van Brederode, ed., Immovable Property under VAT: A Comparative Global Analysis, 2011. Available at SSRN: https://ssrn.com/abstract=1597421

Benjamin Alarie (Contact Author)

University of Toronto - Faculty of Law ( email )

Jackman Law Building
78 Queen's Park
Toronto, Ontario M5S 2C5
Canada
416-946-8205 (Phone)
416-978-7899 (Fax)

HOME PAGE: http://www.law.utoronto.ca/faculty-staff/full-time-faculty/benjamin-alarie

Pierre-Pascal Gendron

Humber Institute of Technology & Advanced Learning ( email )

3199 Lake Shore Boulevard West
Toronto
Toronto, Ontario M8V 1K8
Canada
416 675 6622 x3223 (Phone)
416 252 7573 (Fax)

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