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    Are Chattels Subject to HST?
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    This is an interesting question because if one were to Google this question you would find many conflicting answers. I actually spent a couple of hours with 4 different representatives of the Canada Revenue Agency (CRA) to determine the answer.

    The short answer is NO. While the representatives of the CRA could not point me to a bulletin this was because in their opinion it was obvious. Until I performed a Google search during a telephone call with a representative from the ruling department, they were not aware there was any confusion. The first reason that the sale of used chattels is not taxable is due to the fact that the seller of a used residential owner-occupied property is not an HST registrant for the purpose of their home. The other reason is that the Excise Tax Act addresses the situation when the supply is a combined supply. The Act provides that where a supply of any combination of services, personal property or real property is made and the consideration of each element is not separately identified where the value of a particular element can reasonably be regarded as exceeding the value of each of the other elements, the supply of all of the elements shall be deemed to be a supply only of a particular element.

    So based on the fact that the seller of a used residential owner-occupied property is not in the business of selling chattels, not an HST registrant and the chattels are not valued separately but rather a smaller item which is incidental to the real property sale, HST is not applicable. The exemption that applies to the real property sale applies also to the chattels.

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