GST and Rental Properties

GST, or Goods and Services Tax, can be complex with regards to the purchase and sale of real estate. We recommend obtaining professional advice (Don Nishio, CA) based in Vancouver, BC is one option) to understand the implications of GST on your particular home purchase or sale. 

GST on Commercial Properties

The GST in British Columbia is 5% and is charged on the sale of commercial property (including furniture and fixtures) and on the nightly rental of that property. A commercial property is defined as a property used for short-term (nightly rentals), generally more than 90% of the time. Therefore, if you own property in Whistler that is rented out on a nightly basis, you will need to be familiar with the HST requirements.

Rental Property Purchase and GST Refunds

Most purchasers of rental property will elect to register for GST, allowing them to claim a refund on GST paid on their purchase of commercial property. If the purchaser is registered for GST prior to the closing date of the real estate purchase, and the vendor is also GST registered, GST will typically be waived on the purchase price. If the purchaser does not register for GST until after the closing date, they can claim the refund on their HST return.

If a property is used for nightly rentals between 50% and 90% of the time, the GST refund will be prorated for the amount of time the unit is rented.

If a property is used for nightly rentals less than 50% of the time, the GST refund cannot be claimed and GST will not be waived.

Changing the Use of a Property

There are particular rules and regulations for changing the use of a property. For example, a property that was previously used for nightly rentals may be purchased by an individual who wishes to live there year round, therefore the property will no longer be commercial. To understand the particular rules that might apply to your situation, please contact a professional.