In general, GST would apply to the supply of a REALTORS® commission to the extent that the services were performed prior to July 1. HST will apply to a REALTORS® commission paid or payable on or after May 1, 2010 to the extent the services are performed on or after July 1, 2010. However, if 90% or more of the services are performed prior to July 1, GST would apply to the entire transaction, including the services provided after June 30.
The Canada Revenue Agency (CRA) has verbally agreed that a reasonable method of prorating could be based on the number of calendar days covered by the service agreement. This would save REALTORS® from having to keep track of the actual amount of time spent providing services to their clients.
The beginning of the service period is the date of the Listing Agreement. The most conservative approach to determining the end date to use for the calculation would be to use the date of closing of the transaction. This ensures that any additional or incidental services are captured after the Purchase and Sale Agreement is concluded and is also consistent with the point in time that the commissions become payable.