When do you have to pay HST on a house?

December 14, 2011

Law Day

In Ontario, HST always applies to the purchase of land unless there is a specific exemption. For most residential resale transactions, there is an HST exemption in place so that it does not apply – as long as the house has been used primarily for personal use there will be no HST. For many new homes, there are significant rebates for HST, as long as you intend to live in the new home or rent it out to a family member.

However, there are some grey areas.

Farms, for example, or homes with significant acreage that was regularly used as part of a farm, may attract HST. It may also apply if a substantial part of the house was used for a business, or if the house was substantially renovated and the owner used input tax credits. The only time it is safe to say that HST will not apply is for a residential property that was always used only for residential purposes and has had no renovations done.

The bottom line? If you’re not sure whether HST will apply, ask a specialist.

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About Cesia

Cesia is a real estate lawyer at Wall-Armstrong and Green, a boutique law firm in Barrie focusing on real estate and estates. When she’s not online, she can usually be found in her garden.

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