Avoid a nasty HST surprise

A recent article in the Globe and Mail describes how some buyers in the Vancouver market may have an unexpected liability for HST. Most sales of primary residences are exempt from HST…but not all of them. You may be aware that HST applies to new homes, but did you know that HST may also apply if you buy a home from an investor?

There is a simple way to protect yourself against and unexpected and large HST bill when you buy a house: make sure that the offer includes a provision that “HST, if any, is included in the purchase price” (Section 9, OREA Agreement of Purchase and Sale). That way, if it turns out that HST applies for whatever reason, the seller will be the one paying the bill, not you.