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5 Minutes With Ryan Deluca

Ryan DeLuca, a realtor with Sotheby’s International Realty Canada,answers some of his client’s most frequently asked questions aboutB.C.’s HST and real estate.

Ryan DeLuca, a realtor with Sotheby’s International Realty Canada, answers some of his client’s most frequently asked questions about B.C.’s HST and real estate.

If GST was only charged on new properties and not resale properties, does this still hold true for HST?

In short, yes. But remember that while HST is not charged on the purchase price of most resale properties, you will still be paying HST on the services you are provided through the deal such as realtor commissions, lawyer or notary fees, home inspections, etc. With new construction, where HST is applicable, you may still be eligible for a partial tax rebate as you would have been under the GST regulations.

What about properties that have been renovated to “like new” condition?

According to Revenue Canada, resale properties that have been renovated so the interior is more than 90 per cent new are subject to HST just as if you were buying a new property. Renovations where less than 90 per cent of the interior of the structure is new is treated as all other resale transactions.

What if I was engaged in a purchase or sale of a property that began before July 1, 2010, and completed after?

All brokerages were advised to use a form in order to calculate the percentage of the deal that was completed prior to implementation of the HST and after it came into effect. When part of a deal was completed before the HST came into effect and part after, a formula is used to blend the portion that is GST taxable and the part that is HST taxable.

When I pay a property transfer tax (PTT) on a brand new property, is that cost added to the purchase price before the HST is calculated?

No. The HST is calculated strictly on the purchase price of the new unit before the PTT is added. You are not taxed on the tax.

Is there anything else I need to know about HST and real estate?

Tax laws are always changing, which is why it is so important to use licensed professionals like realtors, lawyers or notary publics.