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Unique 2 bdrm executive suite in Whistler's finest resort property. This suite offers a private location w/beautiful mountain views and all the fine amenities Four...
| Selling Advice - GST FAQ's
How does GST work?
The Goods and Services Tax is a 5% federal tax which in many countries is a "hidden" tax paid for by the manufacturer of goods and the provider of services and then added on to the cost of the goods or services by the seller, so that the end price would be the same: in one case, as a "hidden" tax, the tax is added in before the final sale, and in the case of a value added tax such as the GST, the tax is added at the point of sale. In Canada, it is no longer "hidden" but is a value added tax and in the case of real estate, it applies to the purchase of new construction and on the resale of accommodations that have been rented out for short term/nightly rentals.
The payment of GST can be deferred if the new purchaser is going to continue to offer the property for short term or nightly rental for 90% of the time and becomes a GST registrant. Becoming a GST registrant is a straightforward procedure of completing four forms. Once you are a GST registrant, you are entitled to claim credits for the GST that you pay, for example on legal fees, property management fees, and utilities such as electricity, gas, cable and telephone. You are then required to charge, collect and remit GST on the nightly rentals, which in some cases may be done through your property manager. You will be required to file an annual GST return as well.
Do I have to pay Goods & Services Tax (GST)?
The goods and services tax replaced the 13.5% federal manufacturers sales tax in 1991. Although the tax is collected at a rate of 5% on the sale price of goods and services, it doesn't apply to every type of home or every form of real estate service. GST rebate is available under certain conditions where the house is to be a principal residence. However, most properties in Whistler do not apply.
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 7% GST is charged on the purchase price.
GST on Resale Homes
There is no GST on the purchase price of a used residential property that has been occupied as a residence before you bought it. Used residential property includes an owner occupied house, condominium, apartment, summer cottage, vacation property or non-commercial hobby farm. Used 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 - usually the vendor, pays the tax. GST applies to many other services involved in real estate transactions. |
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