GST – HOW IT AFFECTS YOUR HOME PURCHASE
First and foremost, it is important to note that the GST applies to new homes or homes that have been substantially renovated. It does not typically apply to the resale of homes. Also, it will apply to any service fees like Legal and Real Estate fees.
The Federal Goods and Services Tax (GST) is equal to 5% of the purchase price.
New Housing Rebate
You may be eligible for a provincial New Housing Rebate if you buy a home as your primary residence. According to Revenue Canada, the Definition of House for this rebate is:
- a single family home
- a residential condominium unit
- a duplex
- a mobile home
- a floating home
It also includes a bed and breakfast if more than 50% of the house is your primary place of residence. Otherwise, only the part that is your primary place of residence is a house for purposes of this rebate.
For more information visit Revenue Canada Agency’s website by clicking here.
The GST is not the PTT
The Property Transfer Tax (PTT) is a separate provincial tax on all property transfers. The rate is 1% on the first $200,000 and 2% on the remainder of the fair market value of the property (usually the purchase price) before the GST is applied.
IF, you are a first time home buyer, you may be exempt from this tax! If you’re not sure that you qualify, you can always give me a call at 250-756-2112.