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GST/HSTDecember 14, 2020by Private Enterprises Services Group0GST/HST Implication for real estate transactions

Canadian legislation indicates that any real property located in Canada is within the scope of the GST/HST. GST/HST applied equally to both land and buildings.

Did you know that all the following transactions are subject to GST/HST?

  1. Sale of real estate property, including a transfer of a deed or of possession under an agreement to transfer the deed for consideration
  2. An exchange, gift or barter transaction
  3. The assignment of an agreement of purchase and sale or a lease.
  4. Construction of a residential complex and lease it to tenants
  5. Conversion of a commercial real estate property to a residential complex
  6. Conversion of a real estate property to a significantly greater or lesser degree of commercial use
  7. Conversion of a real estate property from use in an exempt activity to use as a residential complex

Regardless of whether you hold the real property individually, through a partnership or an incorporated entity, failure to consider the implication of GST/HST could have a significantly adverse impact on your investment and your cash flow.

Thinking about planning ahead? Speak to a partner of our firm to find out.

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