Gain clarity on Harmonized Sales Tax (HST) with our easy-to-understand fact summary sheet. Khan Law breaks down key points that affect your real estate transaction. Whether you're a buyer or seller, understanding HST implications can save you time, stress, and unexpected costs.
Contact ▸In Ontario, the Harmonized Sales Tax (HST) has been in place since July 1, 2010, merging the 5% federal GST with the 8% provincial PST into a single 13% HST. This tax applies to many real estate transactions and can significantly impact your home closing costs.
The payable amount of harmonized sales tax ontario often depends on the type of property you’re buying. Whether it’s a brand-new home, a resale, or a commercial property, each comes with different tax considerations. The amount for HST Ontario can add up quickly, and it’s not always included in the purchase price.
To avoid costly surprises at closing, it’s best to consult with a real estate lawyer who understands Ontario’s HST rules, can review your transaction, and confirm how much HST applies. At Khan Law, we help buyers navigate these details and offer clear guidance tailored to your situation.
Need help figuring out the Canada HST break, HST registry rules, or how HST affects your real estate deal? Reach out today, we’re here to make it simpler.
When you're buying a used resale residential property in Ontario, the good news is that the transaction is generally exempt from HST under the Excise Tax Act. This means the purchase price listed in your Agreement of Purchase and Sale should already include any applicable tax. Still, it’s always wise to have a real estate lawyer Oakville review your agreement to make sure everything checks out and there are no unexpected HST Ontario charges on closing.
If you're buying a newly built house or condominium, HST does apply, as long as the closing happens after July 1, 2010. Most builder agreements already include hst amount in Ontario along with the purchase price, which can make budgeting a little easier. These types of purchases often qualify for the HST New Housing Rebate if the property will be your primary residence.
But, if you’re purchasing the new property strictly for investment and do not plan to move in, you won’t be eligible for this rebate. In that case, you’ll need to repay the rebate amount, often around $24,000 if the property is over $450,000, or somewhere between $20,000 and $30,000 if it’s below that price point.
This repayment typically appears as an adjustment on your final closing costs. There is a silver lining though. If you lease the property to a tenant for at least one year, you can apply for the HST Rental Rebate, which is roughly equal to the amount you had to repay.
This rebate must be applied for within two years of closing. To make sure you’re not caught off guard, it's strongly recommended that you speak with a real estate lawyer about the specific harmonized sales tax ontario rules that apply to your situation. A legal review can help you understand your eligibility for rebates and how to plan your finances ahead of closing.
When purchasing a newly constructed home or condo on assignment from a builder, the rules for Harmonized Sales Tax (HST) largely mirror those of a standard builder purchase. The purchase price typically includes HST, along with the HST New Housing Rebate, as long as you’re buying with the intention of living in the property. But, in assignment deals, builders don’t always apply the HST New Housing Rebate at closing, even if you, the assignee, qualify.
In such cases, you'll be required to pay the full HST amount to the builder as an adjustment at final closing. This can significantly impact your closing costs, so it’s important to clarify your rebate eligibility early on. If you do qualify, you can still recover the HST New Housing Rebate, but you’ll need to apply for it yourself after the final closing. To be eligible, you must have purchased the property with the intention of using it as your primary residence, and you must have actually moved in after closing.
If the assignor used the property as a rental during occupancy, this could impact your eligibility. Make sure you verify the property’s use prior to your assignment. For investors buying on assignment, the HST Rental Rebate is still an option. To qualify, you'll need to lease the property to a tenant for at least one year, and apply for the rebate within two years of your final closing.
The rebate amount typically mirrors the New Housing Rebate you'd otherwise have received. To avoid unexpected tax implications and ensure a smooth transaction, it’s always wise to consult a real estate lawyer experienced in Ontario HST rules and assignment agreements.
If you're purchasing commercial real estate in Ontario, the Harmonized Sales Tax Ontario (HST) will apply to your transaction. This is an important part of the closing process, especially if you’re buying through a corporation. In most cases, if your corporation has a valid HST number on the date of closing, you can choose to self-assess and remit the HST directly to the Canada Revenue Agency (CRA) after closing.
To proceed this way, you’ll need to provide the seller with an HST Indemnity at the time of closing. If your corporation does not have an active HST number on the closing day or you’re unable to issue an HST Indemnity; the seller will collect the HST Ontario amount payable and remit it to the CRA on your behalf. This adds a significant cost to your transaction and should be considered early during your purchase planning.
After closing, your accountant will help determine if any additional HST is payable, and if any amounts need to be self-assessed and remitted. Understanding your responsibilities here is key to staying compliant with HST tax rules in Canada.
To avoid surprises, it's wise to consult a knowledgeable real estate lawyer in Ontario who understands the ins and outs of HST on commercial properties and can guide you on registration, indemnities, and closing requirements.
When purchasing a business through an asset sale, Harmonized Sales Tax (HST) is typically payable on the value of the business assets. However, if both the vendor (supplier) and purchaser (recipient) are registered for HST and have valid HST numbers, they may be eligible to jointly elect to avoid HST charges on the sale of the business.
This joint HST election applies when:
This provision can be especially helpful in preserving cash flow during business transactions. Still, it’s essential to consult a real estate lawyer to ensure eligibility and compliance when applying for this HST election.
No matter the type of real estate transaction (residential or commercial) certain HST amounts will be due on various services.
You’ll be required to pay:
The Ontario HST percentage can significantly impact your closing costs, so knowing the HST amount in Ontario and using an HST calculator can help you prepare in advance. For more detailed guidance, contact Khan Law today for a personalized HST Fact Summary Sheet tailored to your transaction.
Every real estate transaction is unique, and HST implications can be complex. At Khan Law, our experienced real estate lawyers are here to guide you through your purchase or sale with care and clarity. If you need help understanding the HST Fact Summary Sheet, calculating your HST amount in Ontario, or getting a clear quote for your closing, just give us a call - we’re ready to help.
In Ontario, Harmonized Sales Tax (HST) may apply to certain real estate transactions. The legal team at Khan Law ensures all HST-related obligations are clearly addressed and properly documented to protect your interests from start to finish.
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