One of the most confusing areas of Real Estate is the GST. Most resale homes are exempt from GST, 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 GST" or "GST included", and who gets the GST new home rebate.
Buying a vacation cottage, ski chalet or a hobby farm is even more confusing:
- If and individual is selling, GST 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 GST registrant and did claim the input tax Credit
- If the seller is a corporation, 5% GST is typically payable because most corporations would be a GST registrant.
Residential rents are exempt from GST, as are condo maintenance fees. But GST 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 GST, check it out before signing an offer because if you're wrong, it can be a 7% mistake.
For details on GST 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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