1.HST on Real Estate Commissions (including transitional period)

Generally, HST will be payable on commissions for any real estate sale closed after July 1, 2010. However, the general transitional rule for sale contracts entered into before July 1, 2010, is, that if 90% of the services were performed prior to July 1, 2010, only 5% GST is payable (no 8% PST). If an offer to purchase real estate was accepted prior to July 1, 2010, then the realtor services were performed prior to July 1, 2010, and only 5% GST should be payable even though the realtor's commission is not due for payment until the sale has closed after July 1, 2010.

2.HST and Resale Residential Property Purchases

There will be no HST on the price of resale residential purchases.

3.HST and Resale Cottage/Vacation Property Purchases

HST will not be payable on the price if the property sold by the seller and bought by the buyer is personal use property. However, if the seller had been renting out the property more than 50% of the time during the seller's ownership, the price will likely be subject to HST. If the property being sold was part of a rental pool, HST will apply. Consult your tax accountant.

4.HST on a Purchase of a Substantially Renovated Home

If a residence being purchased has been "substantially renovated", it will be treated in the same manner as buying new construction from a builder and HST will generally apply to the price paid. Canada Revenue Agency (CRA) Bulletin B-092, which states that a "substantial renovation", in effect, refers to a renovation where at least 90% of the interior of a building (excluding the foundation, external walls, internal supporting walls, roof, floors and staircases) has been removed or replaced.

5.HST on Purchases of Newly Constructed Residential Property

(a) Builder's Agreement Prior to June 19, 2009
No HST is payable if an offer to purchase from a builder was accepted prior to June 19, 2009 (only GST will apply; however, most builders include GST inside the sale price). Note: Buying by way of an assignment, where the builder sale agreement was signed prior to June 19, 2009, becomes attractive!

(b) Builder's Agreement Accepted after June 18, 2009
If an offer to purchase from a builder was accepted after June 18, 2009, and either occupancy closing (for a new condo purchase) or final closing occurs prior to July 1, 2010, HST is not payable; HST is payable if both occupancy (in a new condo purchase) and final closing occur after July 1, 2010.

(c) If Builder's Agreement is Silent about HST
If an offer to purchase from a builder was accepted after June 18, 2009, and failed to make reference to HST, the sale price includes Ontario's 8% PST component of the HST, if it is payable (which means that the builder must pay the PST and cannot charge it to the buyer).