The question sometimes arises with buyers whether there is sales tax on the property they wish to buy. Interestingly, the question almost never arises with sellers. In any case, you don't want to find out from the tax inspector after the sale that you didn't pay or that you didn't charge a tax you should have.
A lot of information is available online on the CRA's website, if you can understand it and have the time to go through it all. I did go through it, and still had questions, so I called the revenue agency and got transferred to a lady by the name of Céline who was very helpful and answered the rest of my questions.
Here are the basics, assuming it is not business, you are not earning money from your property, and you are a Canadian citizen by taxation laws.
- A house that is the primary residence of the owner is not taxable.
- A new home bought from the builder is taxable, so expect to pay GST and provincial sales tax or HST. In most cases you should be able to get a reimbursement for part of those taxes through various government programs.
- A piece of land that you inherited or bought without the goal of making money off it can be sold without sales tax
- However if you subdivide any individual lot, that sale will be taxable if you divide it into more than two parts. For example, if you inherited four lots, you can sell them each as is without collecting sales tax, but if you decide to divide one of the lots into three parts, those three parts will all be taxable.
Whether you are buying or selling, it is important to know whether the property in question is taxable. If in doubt, ask your Century21 realtor.