GST - Part of closing costs?
- Thread starter ronwin
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QUOTE (ronwin @ Feb 15 2010, 12:17 PM) I was wondering if anyone can offer some insite on how the GST should be handled in doing an property analysis? Is it included as part of the closing cost or included in the mortgage?
Any input appreciated.
Thanks in advance.
Les
GST is a cost on new homes/condos. It has to be paid on closing.
Most banks would lend on TOTAL price (including GST).
Some banks may not lend you more than 80% on net.
It helps to ask a mortgage broker or bank .. I would think it differs by bank. Most folks who buy new also do not use CMHC insured mortgages over 80% LTV. But some do ..
So, if the condo costs $400,000 plus 5% GST i.e. $420,000 would CMHC lend you 95% of 420K ? I don`t know but why not (assuming your income and other debt levels are OK too) ?
Any input appreciated.
Thanks in advance.
Les
GST is a cost on new homes/condos. It has to be paid on closing.
Most banks would lend on TOTAL price (including GST).
Some banks may not lend you more than 80% on net.
It helps to ask a mortgage broker or bank .. I would think it differs by bank. Most folks who buy new also do not use CMHC insured mortgages over 80% LTV. But some do ..
So, if the condo costs $400,000 plus 5% GST i.e. $420,000 would CMHC lend you 95% of 420K ? I don`t know but why not (assuming your income and other debt levels are OK too) ?
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QUOTE (ThomasBeyer @ Feb 15 2010, 02:02 PM) GST is a cost on new homes/condos. It has to be paid on closing.
Most banks would lend on TOTAL price (including GST).
Some banks may not lend you more than 80% on net.
It helps to ask a mortgage broker or bank .. I would think it differs by bank. Most folks who buy new also do not use CMHC insured mortgages over 80% LTV. But some do ..
So, if the condo costs $400,000 plus 5% GST i.e. $420,000 would CMHC lend you 95% of 420K ? I don`t know but why not (assuming your income and other debt levels are OK too) ?
Properties in Canmore that participate in rental pools do have ways of deferring the GST. Such properties would continue to be subject to GST upon resale. It can be quite tricky in some markets to figure out which resales do require GST and which ones don`t. On the otherhand, if you do buy in a complex with a rental pool, when buying a non-participating property you could possibly reclaim the GST when you re-enter it in the pool. Also, a rental pool unit could end up being significantly cheaper than one that is not, provided you keep the unit in the pool.
GST is sooooooo tricky. When playing this game talk with a knowledgeable accountant.
Most banks would lend on TOTAL price (including GST).
Some banks may not lend you more than 80% on net.
It helps to ask a mortgage broker or bank .. I would think it differs by bank. Most folks who buy new also do not use CMHC insured mortgages over 80% LTV. But some do ..
So, if the condo costs $400,000 plus 5% GST i.e. $420,000 would CMHC lend you 95% of 420K ? I don`t know but why not (assuming your income and other debt levels are OK too) ?
Properties in Canmore that participate in rental pools do have ways of deferring the GST. Such properties would continue to be subject to GST upon resale. It can be quite tricky in some markets to figure out which resales do require GST and which ones don`t. On the otherhand, if you do buy in a complex with a rental pool, when buying a non-participating property you could possibly reclaim the GST when you re-enter it in the pool. Also, a rental pool unit could end up being significantly cheaper than one that is not, provided you keep the unit in the pool.
GST is sooooooo tricky. When playing this game talk with a knowledgeable accountant.
QUOTE (ronwin @ Feb 15 2010, 12:17 PM) I was wondering if anyone can offer some insite on how the GST should be handled in doing an property analysis? Is it included as part of the closing cost or included in the mortgage?
Any input appreciated.
Thanks in advance.
Les
Thanks Thomas and Godfried. I guess to clarify a little (some thing im getting used to) the question I had was with respect to a multi unit compex more than 5 units. I think Thomas answered 1/2 the question in that most banks will just add this to the mortgage not the "cash required for close" component. It is my understanding that the buyer pays GST (to be remitted by seller) on all resale multi family units, is this correct or not?
Thanks
Les
Any input appreciated.
Thanks in advance.
Les
Thanks Thomas and Godfried. I guess to clarify a little (some thing im getting used to) the question I had was with respect to a multi unit compex more than 5 units. I think Thomas answered 1/2 the question in that most banks will just add this to the mortgage not the "cash required for close" component. It is my understanding that the buyer pays GST (to be remitted by seller) on all resale multi family units, is this correct or not?
Thanks
Les
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QUOTE (ronwin @ Feb 15 2010, 05:16 PM) .. It is my understanding that the buyer pays GST (to be remitted by seller) on all resale multi family units, is this correct or not?
no GST is payable on multi-family or any residential properties ON RESALE. Only on NEW ones.
Or you pay GST on commercial (retail, industrial, raw land or office) or the % of the building (say if the 1st floor has retail and 4 stories of apartments upstairs)
no GST is payable on multi-family or any residential properties ON RESALE. Only on NEW ones.
Or you pay GST on commercial (retail, industrial, raw land or office) or the % of the building (say if the 1st floor has retail and 4 stories of apartments upstairs)