Section 208 — Excise Tax Act: Acquisition of capital real property by individual

Subject to this section, where an individual who is a registrant acquires real property for use as capital property of the individual but primarily for the personal use and enjoyment of the individual or a related individual, the tax payable by the individual in respect of the acquisition of the property shall not be included in determining an input tax credit of the individual. For the purposes of this Part, where an individual who is a registrant last acquired real property for use as capital property of the individual and primarily for the personal use and enjoyment of the individual or a related individual, or not for use in commercial activities of the individual, and the individual begins, at a particular time, to use the property as capital property in commercial activities of the individual and not primarily for the personal use and enjoyment of the individual or a related individual, the individual is deemed to have received, at the particular time, a supply by way of sale of the property; and except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the basic tax content of the property at the particular time. Where an individual who is a registrant last acquired real property for use as capital property in commercial activities of the individual and not primarily for the personal use and enjoyment of the individual or a related individual, and the individual increases, at a particular time, the extent to which the property is used in commercial activities of the individual without beginning to use the property primarily for the personal use and enjoyment of the individual or a related individual, for the purposes of determining an input tax credit of the individual, the individual shall be deemed to have received, at the particular time, a supply by way of sale of a portion of the property for use as capital property exclusively in commercial activities of the individual; and except where the supply is an exempt supply, to have paid, at the particular time, tax in respect of the supply equal to the amount determined by the formula A × B where A is the basic tax content of the property at the particular time, and B is the extent (expressed as a percentage of the total use of the property by the individual at the particular time) to which the individual increased the use of the property in commercial activities of the individual at the particular time. Where an individual who is a registrant acquires, imports or brings into a participating province an improvement to real property that is capital property of the individual, the tax payable by the individual in respect of the improvement shall not be included in determining an input tax credit of the individual if, at the time that tax becomes payable or is paid without having become payable, the property is primarily for the personal use and enjoyment of the individual or a related individual.