Capital real property

Sales or leases of capital real property are generally taxable.

There are some specific sales and leases of real property that are exempt of the GST/HST. Some examples include:

• the sale of a used house, where the seller is not the builder of the house and has not claimed any input tax credits (ITCs) for the acquisition of the used house
• the sale of farmland by an individual to a related individual where the farmland was only used in a commercial activity that is the business of farming and the related individual is purchasing the farmland for personal use and enjoyment
• the lease of a residential complex to an individual who occupies it for a continuous period of at least one month
• the lease of a residential unit to an individual who occupies it for $20 or less a day

Charities may be able to claim a 50% public service bodies' rebate for the GST/HST paid or payable on purchases of the real property for which they cannot claim an ITC. For more information see, How to you calculate your net tax if you are a charity.

Sales

As a vendor, whether or not you are registered for GST/HST, you have to collect GST/HST from the purchaser on a taxable sale of real property unless:

• you are a non-resident of Canada (even if you have a permanent establishment in Canada)
• the purchaser is registered for GST/HST and is not an individual buying a residential complex or cemetery plot or similar site
• you and the purchaser have made an election using type 2 on Form GST22, Real Property - Election to Make Certain Sales Taxable

Under these conditions, the purchaser of real property has to remit the GST/HST owing directly to us.

Purchases

If you buy taxable real property and the vendor does not have to collect GST/HST from you because of the conditions above, you have to report GST/HST owing on either your GST/HST return or by filing Form GST60, GST/HST Return for Acquisition of Real Property.

If you are a registrant who intends to use the real property more than 50% in commercial activities, report the GST/HST owing on the purchase on line 205 of your GST/HST return for the reporting period in which the tax becomes payable.

In all other cases, you have to remit GST/HST owing by filing Form GST60. You have to file this form by the end of the month after the month in which you bought or took possession of the property, regardless of when your GST/HST return is due.

If you use the real property more than 10% in commercial activities, you can claim an ITC on line 106 of your GST/HST return. For more information, see Claiming ITCs.

Forms and publications

• Guide RC4022 General Information for GST/HST Registrants
• Guide RC4082 GST/HST Information for Charities
• Form GST22 Real Property - Election to Make Certain Sales Taxable
• Form GST60 GST/HST Return for Acquisition of Real Property
• GST/HST Memorandum 8-1, General Eligibility Rules
• GST/HST Memorandum 8-2, General Restrictions and Limitations
• GST/HST Memorandum 19, Special Sectors: Real Property
• GST/HST Info Sheets GI-002 Sales of Farmland by Individuals
• GST/HST Info Sheets GI-003 Sales of Vacant Land by Individuals
• GST/HST Info Sheets GI-004 Sales by Individuals of Owner-Occupied Homes

Date modified:

2013-04-12