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Discussion Starter #1 (Edited)
Hello folks,

Here's a hypothetical I'm wrestling with:

A buyer purchases two adjacent pieces of bare land with the intention of building a home on one of them.

Time passes, and the buyer realizes they can't afford to build after all.

The buyer sells both properties for a small profit, 2-3 years after the date of original purchase, without any improvements made.

Does GST apply?
 

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Discussion Starter #4
Oh dear, I just realized the error in my subject title.

Yes, I am looking at this only to see whether GST applies, not capital gains.

The legislation says that GST applies to a sale of land by an individual to another individual where:

-immediately before the land changes hands the land was capital property that was primarily used in a business, with a reasonable expectation of a profit, or

-the land was sold as part of a business selling land, or

-the land was sold as a result of an "adventure or concern in the nature of trade"

I think that one of the 2 properties is GST-taxable based on the third category, but not both.

I just thought I'd throw this out here, as I haven't found an interpretation bulletin on this issue (but one surely must exist - I must be making a mistake here).
 

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What about if you intended to build a personal use home on both lots? Intentions often count a lot with the CRA.
 

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Suggest you submit your question to CRA. According to their info Sheet GI-003, a plot of vacant land that "had been kept for personal use" is exempt. But you bought two plots, so I suspect they would not agree that you would have a legitimate personal use for two building lots - only one.
 

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No if the land was used for your personal use and enjoyment GST should not be applicable. However if you had two or more buildings lots severed from a parcel of land that you own then you are considered a land developer and GST would be applicable.
 
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