Grandparented sales of new housing in Ontario

The HST at 13% generally applies to a taxable sale of housing in Ontario where both ownership and possession were transferred after June 2010, unless the sale was grandparented. GST at 5% applies to grandparented sales.

The grandparenting rule generally applies where a written agreement of purchase and sale for a newly constructed or substantially renovated detached house, semi-detached house, attached house, residential condominium unit, or condominium complex was entered into before June 19, 2009, and both ownership and possession are transferred to the purchaser under the purchase and sale agreement after June 2010.

In the case of a detached house, semi-detached house or attached house, the purchaser must be an individual for the sale to be grandparented. In the case of residential condominiums, the grandparenting rule applies to all purchasers, including individuals.

Grandparenting does not apply to:

• owner-built homes; and
• duplexes, traditional apartment buildings, mobile homes, modular homes, and floating homes.

Assignment of purchase and sale agreements for grandparented housing in Ontario

Where a written agreement of purchase and sale for grandparented housing is assigned to another person (assignee), the housing will remain grandparented if the assignee receives ownership and possession of the grandparented housing under the agreement with the original builder after June 2010 and:

• there is no novation of the agreement;
• the purchaser and the original builder are dealing at arm's length and are not associated for GST/HST purposes;
• the original builder does not reacquire by way of sale any legal or beneficial interest in the housing; and
• a person who is not dealing at arm's length (aunts and uncles are considered to be related to their nieces and nephews under these rules) with, or who is associated with, the original builder does not acquire by way of sale any legal or beneficial interest in the housing.

Forms and publications

• GST/HST NOTICE244, Harmonized Sales Tax for Ontario - Questions and Answers on Housing Rebates and Transitional Rules for Housing and Other Real Property Situated in Ontario
• GST/HST Info Sheet GI-098, Harmonized Sales Tax: Resales of New Housing in Ontario and British Columbia

Date modified:

2014-11-07