If you’re thinking about buying a condo in Vancouver it’s important to have an understanding of when the Goods and Services Tax (GST) will be applicable, to your purchase and when it won’t. The GST can have an impact on the cost of your condo so lets dive into the specifics.
Instances where GST is Applicable
1. Newly Constructed Condos: Typically, newly built condos or those that have undergone substantial renovations are subject to the GST. This means that if you’re buying a brand condo directly from a developer it’s likely that you’ll need to pay 5% of the purchase price as GST.
2. Pre-Sale Condos: Condos purchased during their pre-sale phase are also subject, to the GST. The tax is calculated based on the purchase price, however it’s important to note that some developers may already include the GST in their prices. It is always important to ask up front. In the case of Assignments, it it critical that you check with the seller as to whether their asking price includes or does not include GST as it will be applicable.
Instances where GST Doesn’t Apply
1. Resale Condos: If you’re purchasing a condo directly from an owner typically you won’t be required to pay any GST. However there may be some exceptions to consider in cases, like when the condo has been utilized for purposes or short term rentals. It is then seen a unit that was used for business purposes, and GST will apply.
2. Primary Residence: If you plan on making the condo your home you might be eligible for the New Housing Rebate. This rebate can provide assistance with offsetting the GST payable on a condo purchase. It’s important to meet criteria to qualify for this rebate.
To fully comprehend the GST implications of purchasing a condo it is advisable to consult with your real estate agent and seek advice from a tax professional. Furthermore it’s crucial to stay informed about any changes in government regulations and policies as they can impact your decision making process.
For More Information, please check out:
1. GST/HST New Housing Rebate. Canada Revenue Agency
2. GST, on Real Estate. Real Estate Board of Greater Vancouver
3. GST/. Real Property. Government of Canada