Transitional tax adjustment for builders in Prince Edward Island

Builders have to account for a transitional tax adjustment for a grandparented sale of certain types of newly constructed or a substantially renovated housing that was less than 90% complete as of April 1, 2013.

The transitional tax adjustment is up to 2% of the sale price for a detached house, semi-detached house, or attached house. The amount of the transitional tax adjustment for this type of housing is based on the degree of completion as of April 1, 2013.

The transitional tax adjustment is 2% of the sale price for a residential condominium unit or condominium complex. There is no reduction in the transitional tax adjustment based on the degree of completion as of April 1, 2013 for this type of housing but builders will be entitled to claim a Prince Edward Island provincial sales tax (PST) transitional new housing rebate where the housing was at least 10% complete as of April 1, 2013.

The transitional tax adjustment does not apply to sales of traditional apartment buildings, duplexes, mobile homes, and floating homes.

If you are a builder that has to account for the transitional tax adjustment, include the amount of the adjustment in your net tax calculation on your GST/HST return for the reporting period that includes the date possession of the housing is transferred to the purchaser under the written agreement of purchase and sale.

Forms and publications

• GST/HST NOTICE279, Harmonized Sales Tax for Prince Edward Island (P.E.I.) – Questions and Answers on Transitional Rules for Housing and Other Real Property Situated in P.E.I.
• GST/HST Info Sheet GI-146, Harmonized Sales Tax: Information for Builders of Housing in Prince Edward Island

Date modified:

2014-11-07