GST on New Homes, Pre-Sales, Assignments and Resales in Vancouver.

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Written on January 18th, 2023

GST on New Homes, Pre-Sales, Assignments and Resales in Vancouver.

The Vancouver real estate market is home to many pre-construction and pre-sale buyers and investors. One common practice among these buyers is assigning a contract, which involves purchasing a property before it is built and then reselling it for a profit. As a Vancouver Realtor, it is important to understand the GST implications of these transactions.

In general, GST is applicable on new construction. However, the question arises as to whether GST is applicable on assignments or properties that have been sold shortly after being purchased, and have remained vacant during that time.

The answer is that GST applicability depends on the intent of the seller at the time of entering into the contract. If the seller intended to reside in the property, GST is not applicable. However, if the seller had the intention of flipping the property or selling it for a profit, they are considered a builder and GST is applicable.

As a buyer, it is crucial to obtain a representation or warranty from the seller regarding their intent at the time of purchasing the property and whether or not they are considered a builder. This should be clearly stated in the contract, whether the tax is included or not.

In conclusion, GST applicability depends on the intent of the seller at the time of entering into a contract. As a buyer, it is important to obtain a representation or warranty from the seller and ensure that the contract clearly states whether the tax is included or not. This will help all parties involved understand in advance if GST is applicable on the property before closing the deal.

If you have any inquiries, please do not hesitate to reach out to one of our team members for assistance. You can reach Peter Joudaki directly at pj@progressivevancouver.com or 604-779-6306.