Which statement about GST/HST on real estate transactions is correct?
Correct Answer
A) Resale homes are generally exempt; new homes attract GST/HST
Resale residential properties are generally exempt from GST/HST, while new homes and substantially renovated homes are subject to GST/HST. This distinction is important for buyers to understand when budgeting for their purchase.
Why This Is the Correct Answer
Option A correctly identifies the GST/HST treatment for residential real estate. Resale homes (previously occupied residential properties) are generally exempt from GST/HST under the Excise Tax Act. However, new homes and substantially renovated homes are subject to GST/HST as they are considered new construction or major improvements. This distinction is crucial for buyers to understand when calculating total purchase costs and budgeting for their transaction.
Why the Other Options Are Wrong
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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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