Is G.S.T. payable on Whistler Real Estate?
Another topic that generates a lot of buyer FAQ Whistler real estate questions is the one on the Goods and Services Tax (GST). Please note, this is a huge topic and one which cannot and should not be explained fully on any realtor’s website. Realtors have basic knowledge, but they are duty-bound to recommend you take professional advice from an accountant or lawyer. Realtors are not GST experts. In the meantime, the following information has been taken from local lawyers, Race and Company’s website.
“GST is a consumer tax. It is payable on most goods, including real estate. Purchasers will have to pay it unless the real estate is GST exempt, or the purchaser’s use of the property and their GST registration will entitle them to self-assess.
“Whether or not a property is exempt from GST depends on the vendor’s use of the property. If the vendor uses it for residential purposes, then it will be exempt.
“Property that the vendor uses commercially will attract GST. “Commercially” includes being rented or available for rent for periods of less than 28 days. This applies to all phase 2 properties.”
Types of Rental Properties in Whistler
When you are considering the purchase of a property in Whistler, you need to be aware of the zoning. The Zoning and what rental covenants align with the zoning should help determine what you are looking for.
GST on Whistler Real Estate Determined by Vendor
More information from Race and Company states:
“The important point to understand is that the GST status is determined by the vendor. The purchaser should obtain a warranty concerning the property’s GST status in the contract of purchase and sale.
“If a property is subject to GST, the purchaser may self-assess the tax if they register for GST and continue a commercial use of the property. This means obtaining a GST number in advance of the closing date of the transaction. However, if such a property is taken out of the rental pool and kept for personal use, GST will be payable at that time on the market value…It really is important to take professional accounting advice on the property you have chosen before you buy it.”
The Seller Warrants the GST
From the perspective of the Buyer’s realtor, it is up to the Seller to inform their realtor if GST is exempt on the property, or not. This exemption would be shown in the listing data. The Buyer’s agent will require the Seller to warrant that the GST is exempt or not exempt on the Contract of Purchase and Sale.
When do I need a GST number?
The threshold earnings to be a recognized commercial operation is $30,000 gross revenue. Earning that amount enacts the requirement for a GST number.
When you apply for a GST number, you are collecting the GST from each transaction and submitting it to the Canada Revenue Agency. The application will ask if you want to file the GST on each transaction monthly, quarterly, or annually. If you are unsure, then ask the rental management company that you are planning to work with. They may offer the service of taking on that task for you.
GST Collection in the Sale
When GST is payable on a transaction, it is the buyer’s obligation to pay the tax and the seller’s obligation to collect the tax and remit it to the government. If GST is not exempt, the agreement should indicate if GST is included in the purchase price or is in addition to the purchase price.
Obtain Professional Advice
Like most topics that relate to taxes, it is important to obtain advice on your situation in advance of writing an offer. That way, you can sign the offer with the confidence that you understand the legal implications of your tax situation. Once the contract has been accepted, you are dealing with a legal document.
Change of Use
Another aspect of GST is covered in my blog, GST: Change of Use. This may be worthwhile reading if you are questioning the intent of your potential usage.
Taxes and Fees
When buying real estate in Whistler, it is important to understand the taxes and fees that accompany buying and then ownership. Have a look at the following pages for more details. For residents of Canada, your page is Taxes and Fees. For non-residents of Canada, your page is Non-Residents: Taxes and Fees.
FAQ
It depends. This is a huge question and it all depends on what type of Whistler real estate you are buying. It also depends on how often you are planning to use the property for personal use.
If you think I would be a good fit to work with you and your family, and you are not already working with a Whistler realtor, please contact me. I look forward to hearing from you.
It’s a Good Life in Whistler!
Marion
Marion Anderson Personal Real Estate Corporation
marion@WhistlerSkiinSkiout.com (604) 938-3885