House Purchase Triggers GST?

Christine

Inspired Forum Member
Registered
Mar 5, 2008
30
5
8
Vancouver Island
#1
Hello,
I have an offer on a house and the sellers realtor wants me to put a clause in the contract that says I am responsible for GST if GST is triggered. The reason he wants me to do this is because I am buying it with my company (if I was buying it in my own name he would not require this).
This is new to me, but I understand that GST can be triggered on the sale of a house if it was being run as a B&B for instance. This house was not a B&B, the people were living in it.
Has anyone encountered this, any other reason GST would be triggered? (This is in BC)
 

ThomasBeyer

Senior Forum Member
REIN Member
#2
GST is triggered only on new houses, commercial properties or vacant building lots.

GST is independent of buyer. It either is payable or not. If payable AND if buyer is GST registered you can fill out a form and delay it.

Is this a new house ? Or commercial use ? Why would GST apply ?
 
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Devin Roberts

Devin Roberts - Brent Roberts Realty
REIN Member
Nov 17, 2015
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#4
Hi,

In BC it is triggered in a few ways.
Residential: if new or has been substantially renovated
Land: if it was subdivided
Commercial: most properties


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Christine

Inspired Forum Member
Registered
Mar 5, 2008
30
5
8
Vancouver Island
#6
This is just a residential property that I wanted to reno. It does not meet any of the criteria that Devin Roberts mentioned. I have since walked away from the deal for other reasons but the sellers realtor wasn't making it easy that's forsure.
 
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Christine

Inspired Forum Member
Registered
Mar 5, 2008
30
5
8
Vancouver Island
#7
Hi,

In BC it is triggered in a few ways.
Residential: if new or has been substantially renovated
Land: if it was subdivided
Commercial: most properties


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Devin,
Thanks for clarifying this.
When you say substantial renovated, how renovated are we talking about? Who decides?
 

Devin Roberts

Devin Roberts - Brent Roberts Realty
REIN Member
Nov 17, 2015
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#8
Hi,

In BC it is triggered in a few ways.
Residential: if new or has been substantially renovated
Land: if it was subdivided
Commercial: most properties


Sent from my iPhone using myREINspace
Devin,
Thanks for clarifying this.
When you say substantial renovated, how renovated are we talking about? Who decides?
I’d suggest taking a look at this article:
https://www.canada.ca/en/revenue-ag...ons-gst-hst-new-housing-rebate.html#PP48D6095

It is decided by the seller whether to ask for GST or to include it in listing price as they have to pay it. Though, you can argue the request if it does not meet the requirements for GST.

Thanks


Devin Roberts — Brent Roberts Realty
Vancouver REIN Member
Cell: 604-354-7160
Email: Devin@DevinRoberts.ca
 

Christine

Inspired Forum Member
Registered
Mar 5, 2008
30
5
8
Vancouver Island
#9
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Mike Milovick

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Mar 15, 2008
509
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Waterloo, Ontario, Canada
#10
Take the approach that HST is applicable to EVERY good and service in Canada. And that there are a few cases where it is exempt - such as residential re-sale.

The seller is to provide a certificate regarding HST on sale. HST has a nasty time of cropping up on you every now and then - if you are not careful. If, for example, a home business is set up in a seller's home, than theoretically, that percentage of space could be subject to HST on re-sale.

Note that new homes and condos are subject to HST - but they are also subject to HST rebates. And the rebates have to be done correctly in order to qualify.

I would have the seller's lawyer provide written direction as to how HST will be handled in your particular case.
 

Mike Milovick

Inspired Forum Member
REIN Member
Mar 15, 2008
509
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Waterloo, Ontario, Canada
#11
Also, just further clarification. HST can even be applicable on residential resale. I am aware of situation of a cottage deal where, based on short term rentals, it was deemed that HST WAS applicable. Devin makes reference to substantial renovation. I *believe* the percentage is 85%. I have a developer that documents his whole renovation so that it does not exceed this threshold...