Mortgage Glossary

GST (Goods and Services Tax)

6% GST is charged on most types of services involved in the real estate transaction. Some examples include: legal fees, Realtor commissions, appraisals, and surveys.

GST is NOT charged on the purchase price when you are buying a previously occupied residence. This includes a house, apartment, vacation property or non-commercial hobby farm.

GST IS charged when you are buying (or building) a newly constructed residence (house, apartment etc.). The entire amount including land value is subject to the tax. If the residence is to be owner-occupied then you may qualify for a GST rebate of approximately 36% of the GST charged, depending upon the completed value of the property.
GST is sometimes charged on the purchase of a lot.

Check with your lawyer to learn the current rules regarding 'new construction and the GST'.

Revenue Canada GST Link: GST

Note: GST will drop by 1% in 2008

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