GST and your New Home

GST is not applicable to the purchase of all homes.  Only new homes are subject to GST but they may qualify for a GST rebate.  It does not matter whether you are buying a fully detached home, semi-detached home, condominium or townhouse, the entire purchase price including the land is taxable.  If the property is a rental property, there is no rebate available of the GST.

However, if the home is going to be your primary place of residence, it may qualify for a partial GST rebate, depending upon the sale price.  For primary residences costing $350,000 or less, you will receive a rebate of 36% of the GST paid, to a maximum of $8,750. This equates to approximately 4.5% tax on the purchase price. 

For homes over $350,000 and under $450,000, the tax rebate declines to zero on a proportional basis.  For each $1,000 of purchase price above $350,000 the maximum rebate of $8,750 is reduced by 1%.  For example:

• If your purchase price is $400,000, you are $20,000 over and must reduce the maximum rebate by 50%. As such the maximum rebate of $8,750 reduced by 50% equals $4,375.   Therefore the GST payable would be $23,625.
  
  
• For a priced at $450,000, the rebate is reduced 100%, which means that you pay the full 7% GST on the purchase price.
  
  

GST and the Resale Home

There is no GST on the purchase price of a used residential home.  The definition of "used residential property" includes an owner-occupied house, condominium, apartment, summer cottage, vacation property or non-commercial hobby farm. "Used" residential property is that  one that has been occupied as a residence before you bought it.  Used property can also mean a recently built house that is substantially complete and has been sold at least once before you buy it, regardless that it was never owner occupied.

GST and the Real Estate Transaction

GST applies to most of the services provided in completing the real estate transaction and is not reduced even if a rebate is calculated for the purchase price of a home.  The different services that apply include, but are not limited to, realtor charges, legal fees, appraisal and inspection, and so forth.

GST and Rent and Condo Maintenance Fees

There is no GST applicable on residential rents or condominium maintenance fees.  However, any services employed surrounding the rental of a property such as a landlord services and maintenance, are taxed.

Land Transfer Taxes

As a purchaser you need to check with provincial regulations whether there are land transfer taxes that may be applicable.  You can also check with an INVIS Mortgage Consultant or contact us at 1-866-844-6847.