Residential Assignment' GST/HST LawBot

All assignments of Agreements of Purchase and Sale for a new home or a new condominium from a builder are now subject to GST/HST (for all assignment agreements entered into after May 7, 2022).

 

There are no exceptions, even if you planned to live in the property. 

 

GST/HST applies on the assignment profit but not on the deposit portion of the assignment price.

 

For example, if you purchased a pre-construction property for $300,000 with $60,000 deposit, and assigned it prior to closing for $400,000, you would receive $160,000 assignment price from the buyer. Only the profit portion ($100,000) is subject to HST, the deposit portion ($60,000) is not subject to HST.

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Please consult with your real estate lawyer prior to signing your assignment agreement.  

 

Your agreement must specifically provide that the deposit portion of the assignment price is not subject to GST/HST.

 

Generally, assignment agreements provide that GST/HST is included in the purchase price, which means that the assignors (seller) bears the burden of GST/HST. 

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We have also created a tax exposure calculator (Income Tax and HST) for assignments in the course of a business. 

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This is not legal or tax advice. It is very important that you obtain formal GST/HST tax advice from your tax advisor.