June 19, 2019
Harmonized sales tax (“HST”) of 13% is imposed upon every taxable supply (i.e., sale) of property or services in Ontario, including commercial real estate.
For commercial real estate, an exception1 applies where a party making a taxable supply of commercial real property is not required to collect HST so long as the purchaser is an HST registrant. The registrant purchaser is responsible for assessing and directly remitting the HST on the acquisition to the Canada Revenue Agency. The purchaser then typically claims input tax credits (“ITCs”) to offset the HST payable and will not be required to remit amounts for HST.
Standard practice in the sale of commercial real property is for a vendor to obtain a certificate from the purchaser confirming that it is acquiring the property on its own behalf. The purchaser will also provide warranties with respect to registrant status, self-assessment, tax remittance, and applicable indemnities.
Classes of Real Property & Specific Transactions
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