Buyers Guide: What You Need to Know about HST

Buyers Guide: What You Need to Know about GST

If you are a buyer in the Windsor real estate market, it is important to know about GST and make sure you save yourself possibly a lot of money. After searching for houses for sale in Windsor or anywhere else in the Greater Windsor Area, and viewing countless Windsor homes, you have found the one, your offer is accepted, and you're a homeowner. When it comes to your purchase price here is how taxes work in relation to Ontario’s Harmonized Sales Tax (HST).

“The HST at 13%, composed of a federal part at 5% and a provincial part at 8%, would apply to a builder's sale of a newly constructed or substantially renovated residential complex, including a multiple unit residential complex (e.g., an apartment building). The sale of housing that has been previously occupied by an individual as a place of residence and that is exempt from GST would also be exempt for purposes of the HST.”

Seems simple enough right? Word of warning, paying the GST (5%) on a home isn't as cut and dry as you think. Based on the excerpt above, generally GST is due only if you are buying new construction. Additionally, it is paid only once, by the original buyer.⁠ However, the reality is that whether you have to pay GST is ultimately up to the Canadian Revenue Agency (CRA).⁠

There been situations where the GST was paid multiple times for the same property.⁠ First it was paid by the original owner. Then the house was sold and the new buyer was charged GST by the CRA. As a buyer it is important that you are working with the right agent, one who will know to protect you from this. If you are not, all of a sudden you are on the hook for quite the bill, one you didn’t budget for.

Now, our Jumpers aren't tax experts, but they know great ones who can help you out. If you have any questions or concerns be sure to consult with your agent and they can get work with you to get in touch with an accountant and make sure you’re covered. Typically you can avoid these risks by spelling out in the purchase agreement that any outstanding GST is part of the purchase price.

For more information about HST and how it is applied in real estate, CLICK HERE.

Here at Jump Realty our agents will give you honest advice on what course of action is best for you in their professional opinion and will always put taking care of your best interests first! With offices in Windsor, Tecumseh, Kingsville, and Chatham, no matter where you are, a Jump agent is ready to help. Please contact us for any housing needs and let us give you a better real estate experience!