When is GST/HST typically NOT applicable on a real estate transaction?
Correct Answer
B) Purchase of a resale home from an individual
GST/HST is not applicable on resale homes purchased from individual sellers, as these are considered used residential properties. GST/HST applies to new construction, substantial renovations, and assignments of new properties.
Why This Is the Correct Answer
Option B is correct because under the Excise Tax Act, GST/HST does not apply to the sale of used residential properties by individuals. When an individual sells their home (resale property), they are not considered to be engaged in a commercial activity, therefore the transaction is exempt from GST/HST. This exemption applies regardless of the property's value or the seller's other business activities, as long as the property was used as a residence and the seller is not a builder or developer.
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- → In Ontario, what is the standard Land Transfer Tax rate for a residential property purchase of $400,000?
- → Which of the following best describes when land transfer tax is typically paid?
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