Dear Tony: Our strata corporation is more than 400 units and we own two strata lots and four common property cabins that are used as guest suites for resident access only. They are intended for family visits and we only charge $75 per night to cover the cost of cleaning and maintenance.
We have been advised we will be captured by the new legislation on short-term accommodations. If this is true, it would seem unfair and almost impossible for the regulators to identify common property units as they are not registered anywhere.
The corporation was granted the four cabins on development, and because of high demands, we purchased the two additional units for larger families. This has worked incredibly well for our strata, and would be unfortunate to lose access.
Marie Johnson
Dear Marie: There are many strata corporations across ÎÚÑ»´«Ã½ in high rise, townhouse, bare land and resort-type communities not specifically identified in the property descriptions, all of which have guest suites in a variety of configurations.
The good news is that the has a specific exemption for strata corporations: “The principal residence requirement does not apply to the following: (A) common property; (B) a strata lot owned by the applicable strata corporation.” Whether your suites such as guest suites or caretaker suites are strata lots or part of the common property on the strata plan, they are exempt.
A reminder to strata corporations, you are privileged to be non-taxable corporations under the Federal Income Tax Act; however, that does have limitations if your strata corporation becomes a corporate investor or uses your property for commercial purposes to generate revenue.
Strata corporations are entitled to invest and earn tax-free interest on reserve funds and special levies. If your strata corporation is considering a commercial venture, consult a qualified accountant to discuss the operations, classification and application of revenues and taxation reporting. Strata corporations failing to report significant revenues outside of strata fees and interest on accounts have been audited and may have their revenues taxed.
All strata/condo corporations in ÎÚÑ»´«Ã½ must file an annual tax return and information certificate. Residential strata corporations are not eligible for GST refunds as they do not charge GST on strata fees and contributions. A safe and happy holiday to all strata councils, property managers and volunteers who serve their communities.
Tony Gioventu is the executive director of the Condominium Home Owners Association of ÎÚÑ»´«Ã½
