When purchasing a used commercial property in BC, under what circumstances is GST not payable on the transaction?
Correct Answer
B) If it is a residential complex, or a non-registrant sells it and it was not used primarily in commercial activity
Under the Excise Tax Act, the sale of used commercial real property by a GST registrant generally attracts GST. However, if the seller is not a GST registrant (e.g., a non-business individual) and the property was not used in taxable commercial activity, the sale may be exempt. Additionally, properties used as residential rental (long-term) are exempt supplies. Commercial buyers should verify GST status and may need to self-assess.
Why This Is the Correct Answer
Option B is correct because the sale of a used commercial property may be exempt from GST if the seller is not a GST registrant and the property was not used primarily in a taxable commercial activity, or if the property qualifies as a residential complex (e.g., long-term residential rental). Most commercial sales by GST registrants are taxable, but these specific circumstances create exemptions.
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