Budget 2022: Sales and excise tax measures

April 07, 2022

Budget 2022: Sales and excise tax measures

GST/HST on assignment sales by individuals

The Budget proposes to amend the Excise Tax Act to make all assignment sales, in respect of newly constructed or substantially renovated residential housing, taxable for GST/HST purposes. An assignment sale in respect of residential housing is a transaction in which a purchaser (an “assignor”), under an agreement of purchase and sale with a builder of a new home, sells their rights and obligations under the agreement to another person (an “assignee”). Where the assignment includes the reimbursement of a deposit that was paid to the builder under the original purchase and sale agreement, the deposit may be excluded from the consideration in determining the GST/HST payable. As a result of this proposed change, the GST/HST would apply to the total amount paid for a new home by its first occupant, and there would be greater certainty regarding the GST/HST treatment of assignment sales.

The assignor in respect of a taxable assignment sale would generally continue to be responsible for collecting the GST/HST and remitting the tax to the Canada Revenue Agency (CRA). Where an assignor is non-resident, the assignee would continue to be required to self-assess and pay the GST/HST directly to the CRA.

This measure would apply in respect of any assignment agreement entered into on or after the day that is one month after April 7, 2022.

GST/HST health care rebate

The Budget proposes to amend the GST/HST eligibility rules for the expanded hospital rebate to recognize the increasing role of nurse practitioners in delivering health care services, including in non-remote areas. It is proposed that to be eligible for the expanded hospital rebate, a charity or non-profit organization must deliver the health care service with the active involvement of— or on the recommendation of—either a physician or a nurse practitioner, irrespective of their geographical location. This means that the expanded hospital rebate would no longer distinguish between health care services rendered by physicians and nurse practitioners. This measure would generally apply to rebate claim periods ending after April 7, 2022 in respect of tax paid or payable after that date.

Excise tax measures

The Budget proposes the following excise tax measures:

  • Implementation of previously announced excise duty on vaping products, effective as of October 1, 2022. As well, the federal government intends to work collaboratively with provinces and territories that may be interested in a federally coordinated approach to taxing these products which could be achieved through the implementation, under federal legislation and administration, of taxation on a common product base.
  • Elimination of the 100% Canadian wine excise duty exemption, effective June 30, 2022
  • Elimination of the excise duty for beer containing no more than 0.5% ABV, effective July 1, 2022.

Luxury tax

On March 11, 2022, the Department of Finance released draft legislation to implement a proposed luxury tax on the sale of new cars and aircraft priced over $100,000, as well as new boats priced over $250,000. The tax is to be calculated at the lesser of 20% of the value above a set threshold ($100,000 for cars and personal aircraft, and $250,000 for boats) and 10% of the full value of the item subject to the tax.  If enacted, this tax will come into effect on September 1, 2022.

Read our article here for more details on the luxury tax. 

Brian Morcombe, Indirect Tax National Service Line Leader


The information in this publication is current as of April 7, 2022.

This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained therein without obtaining specific professional advice. Please contact BDO Canada LLP to discuss these matters in the context of your particular circumstances. BDO Canada LLP, its partners, employees and agents do not accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.

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