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GTS is charged on commercial properties and on new residential properties. If the property is subject to GST and the agreement does not say about GST, i.e.  whether it  is included in the price or is extra, then the rule is that it is in addition to the price.


Be sure to check with your accountant or lawyer, prior to making the transaction firm.

 

Assignment fees in flip situations are subject to GST.. Therefore the assignment contract should state who pays it otherwise the assignee is stuck paying it.

 

GST is not charged on used residential properties. However be wary of sellers who have very new houses and say they have been lived in and are not therefore subject to GST. M If CRA determines that GST is payable the buyer will have to pay it and good luck trying to sue the seller for misrepresentation. Some people think that if a property is over a year old there is no GST on it. That is not true. 

 

There is a limited rebate of GST for new home buyers, whether first time buyers or not, for properties worth $350,000 or less. The rebate is 36% of the GST paid.  For properties between $350,000 and $450,000 the rebate decreases exponentially with the price.

 

There is also a GST rebate for new residential rental properties. Similar price limits apply and you must have it rented before you can apply for the rebate.  

 

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