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?
- Sale of real estate property, including a transfer of a deed or of possession under an agreement to transfer the deed for consideration
- An exchange, gift or barter transaction
- The assignment of an agreement of purchase and sale or a lease.
- Construction of a residential complex and lease it to tenants
- Conversion of a commercial real estate property to a residential complex
- Conversion of a real estate property to a significantly greater or lesser degree of commercial use
- 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.