New Home Construction Sales Tax?

[nubiwan]

Please excuse my ignorance here but when you buy / sell a new home fo you pay sales tax?



Suppose I built a home, then sold it. Does the buyer pay sales tax (HST etc.)?



Suppose I took the same house and rented it for 18 months. Then decided to sell it. Does the buyer pay sales tax? If not, why not?



Not sure this has been asked before, so all help appreciated.

 

[moparcanuck]

First off, and biggest piece of advise, you're dealing with very large numbers and the sales tax can be a bit hit if you do it wrong. Get an accountant who understands GST/HST on real property.



That being said:



If you build a home and sell it, the buyer would pay you HST. They may or may not (depending on price) be able to then apply for a New Housing Rebate and get part of the amount back.



If you build a home and then rent it out, you would have to 'self assess' the tax on it, and you would send that in as if you had sold it (in a way, you've sold it from BuilderYou to LandlordYou). Again, depending on the value (needs to be backed up somehow) you may be able to apply for a New Residential Rental Property Rebate to get part of the amount back. From that point on, it's now used residential property and would not be subject to HST in the future.