- FP-2022 - Election to Treat a Sale of Real Property (an Immovable) as a Taxable Sale
General information
Consequences of the election
The vendor of real property that makes the election covered by this form may have to include the sale of the real property in the vendor's total taxable supplies. This total is used to determine registration and reporting requirements for the GST/HST and the QST.
If the vendor is registered for the GST/HST and the QST, the vendor may be entitled to claim an input tax credit (ITC) and an input tax refund (ITR) for the sales taxes paid on the purchase of the real property and the cost of improvements.
If the vendor is not registered for the GST/HST and the QST, the vendor may be entitled to claim a rebate for the GST/HST and QST not recovered. To do so, the vendor must complete form FP-189-V, General GST/HST Rebate Application, and form VD-403-V, General Application for a Québec Sales Tax (QST) Rebate.
Eligibility requirements for types 2 and 3
Type 2 or 3 applies to the vendor if the following requirements are met:
-
The vendor and the purchaser jointly elect to have the tax(es) in question apply to the sale.
-
The purchaser of the real property previously sold the same real property to the current vendor. That sale was taxable and is the most recent sale of the real property.
-
When the purchaser sold the same real property to the current vendor, the sales contract included a right or an obligation for the purchaser to repurchase the real property.
-
The vendor is reselling the real property to its previous owner (the purchaser) in the year that follows the earlier of the following dates:
-
the date the vendor took possession of the real property;
-
the date the vendor purchased the real property (transfer of ownership).
-
Note
Type 2 or 3, as applicable, may also apply to the vendor if the
vendor is a trust that was not the purchaser for the previous sale.
Such a trust may be:
-
a personal trust (other than a testamentary trust), the settlor of which was the purchaser for the previous sale;
-
testamentary trust that arose from the death of an individual who was the purchaser for the previous sale.
Additional eligibility requirements for type 2
For the vendor to check the box corresponding to type 2, the following additional requirements must be met:
-
The vendor of the real property is not the builder of the real property.
-
Where an addition was made to a multi-unit residential complex, the vendor is not the builder of the addition.
-
When the construction or the last substantial renovation of the real property was substantially completed, the real property was not used by any individual as a place of residence or lodging.
-
In the case of an interest in the real property, the vendor sold the interest within one year after the day the interest was purchased.
Note
The election cannot be made if the vendor claimed input tax credits
(ITCs) and input tax refunds (ITRs) for the purchase of the real
property or for substantial renovations to it.
Filing the form
Type 1
The vendor must file this form before the earlier of the following dates:
-
the date of transfer of possession, according to the sales contract;
-
the date of transfer of legal ownership.
Send the form to Revenu Québec at one of the following addresses:
-
3800, rue de Marly
Québec (Québec) G1X 4A5 -
C.P. 3000, succursale Place-Desjardins
Montréal (Québec) H5B 1A4
Type 2 or 3
This form must be enclosed with the GST/HST and QST return filed by the purchaser for the reporting period that includes the date the vendor resold the real property to the purchaser, unless the purchaser files the return online. In such a case, this form must be completed on paper and mailed to one of the addresses shown above.
Questions?
If you have questions about the election to treat the sale of real property as a taxable sale, contact Revenu Québec's client services at 418 653-4692 in the Québec City area, at 514 873-4692 in the Montréal area, or, toll-free, at 1 800 567-4692.