GST and Real Estate
GST is not applicable on resale homes (homes that have already been lived in and are not brand new).
GST is applicable on the purchase of new construction, some vacant land, and on the resale of investment/revenue properties (accommodations that have been rented out for periods shorter than 1 month).
The payment of GST can be deferred if the new purchaser is going to continue to offer the property for short term rental for 90% of the time and becomes a GST registrant. GST registrants are entitled to claim credits for the GST paid on legal fees, property management fees, and utilities such as electricity, gas, cable and telephone. GST registrants are required to collect and remit GST on the short term rentals, which in some cases may be done through a property manager. An annual GST return must be filed and is also straightforward.
GST on New Homes
When you buy a newly constructed home, condominium or townhouse, the entire purchase price including land is taxable. 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. If the property is to be rented to tenants, the full 5% GST is charged on the purchase price.
GST on Resale Homes
There is no GST on the purchase price of a resold residential property that has been occupied as a residence before you bought it. Resale residential property includes an owner occupied house, condominium, apartment, summer cottage, vacation property or non-commercial hobby farm. Resale property can also mean a recently built house that is substantially complete and has been sold at least once before you buy it.
GST and Real Estate Deals
GST applies to most of the services provided in completing a real estate transaction. For example, 5% GST is applied to the real estate commission. The person responsible for paying the commission pays the tax.
You may notice several Phase 1 listings that indicate "No GST" as a selling feature. This indicates that the declared usage on that roperty is for owner use or long-term rentals, and not for nightly rentals.
Please get in touch with me so that I can elaborate on this interesting GST cycle specific to Whistler Phase 1 properties.