One of the most confusing areas of Real Estate is the HST. Most resale homes are exempt from HST, but buyers should still ask the appropriate question and deal with it in their offer to purchase, to be safe. For brand new homes and condos, the offer should say whether the purchase price is "plus HST" or "HST included", and who gets the HST new home rebate.
Buying a vacation cottage, ski chalet or a hobby farm is even more confusing:
- If and individual is selling, HST is exempt if it was paid at the time of purchase and no input tax credit was claimed, but applicable if the individual is a HST registrant and did claim the input tax Credit
- If the seller is a corporation, 12% HST is typically payable because most corporations would be an HST registrant.
Residential rents are exempt from HST, as are condo maintenance fees. But HST is payable on Real Estate commissions, legal fees, some disbursements, and the cost of a new survey and a home inspection. If in doubt about HST, check it out before signing an offer because if you're wrong, it can be a 12% mistake.
For details on HST related to Property transactions, go to Revenue Canada's website:
http://www.cra-arc.gc.ca/menu/GTMS_19-e.html
Here you will find numerous publications on the various applications.
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