1) HST and  Mortgage Brokerage Fees (to arrange a mortgage, if one uses a Mortgage Broker)
HST will not apply since mortgage brokerage services are exempt as part of the financial services industry.

2) HST on Real Estate Commissions
Generally, HST will be payable on commissions for any real estate sale closed after July 1, 2010.  However, the
general transitional rule (for sale contracts entered into before July 1, 2010), is if at least 90% of the services
were performed prior to July 1, 2010, only 5% GST is payable (no PST).  If an offer to purchase real estate was
accepted prior to July 1, 2010, then the realtor services were performed prior to July 1, 2010, and only 5% GST
should be payable even though the realtor’s commission is not due for payment until the sale has closed after July
1, 2010. Warning to sellers: If, prior to July 1, 2010, a seller is about to accept an offer to purchase (which will
close after July 1, 2010), the seller should clarify in writing with the realtor that only GST will be payable
on commissions due on a sale closing after July 1, 2010.

3) HST and Rents Paid by Tenants
For residential tenancies, HST will not apply to such rents. For commercial tenancies (industrial, office or retail), HST
will be charged on rents paid after July 1, 2010 (but most commercial tenants qualify to recover such HST payments
through input tax credits).

4) HST and Condominium Monthly Maintenance Fees
For residential condominiums, HST will not apply on monthly common expenses,  but HST is payable for
commercial (retail), office, industrial) condo common expenses paid on or after July 1, 2010 (most commercial
condo owners  qualify to recover such HST payments through input tax credits).

5) HST on HOME RENOVATIONS
For any part of services (labour and materials) provided after July 1, 2010 (no matter when a contract for
renovations of a residence was signed), the part performed or provided after July 1, 2010, will be subject to HST.

6) HST and RESALE COTTAGE / VACATION PROPERTY PURCHASES

HST will not be payable on the price if the property sold by the seller and bought by the buyer is personal use
property.  However, if the seller had been renting out the property more than 50% of the time during the seller’s
ownership, the price will likely be subject to HST.  If the property being sold was part of a rental pool, HST will
apply.  Consult your tax accountant.

7) HST and RESALE RESIDENTIAL PROPERTY PURCHASES
There will be no HST on the price of resale residential purchases.  Note: Resale residential purchases will
therefore become a much more attractive investment (rather than buying from a builder) particularly when one
considers that builder prices will result in 13% HST (whether built into the price or being structured in
addition to the price by some builders in Ontario).  Builder prices also must include higher increased current
costs of labour, materials and land costs as well as substantial municipal levies and educational levies 
plus sizable closing adjustments (often being hidden by builders in the fine print of many pages in a builder’s
agreement), all of which are not payable by a buyer / investor who purchases resale residential property.
(Think about it!)

8) HST on a PURCHASE OF A SUBSTANTIALLY RENOVATED HOME
If a residence being purchased has been “substantially renovated”, it will be treated in the same manner as
buying new construction from a builder and HST will generally apply to the price paid.  See Canada Revenue
Agency (CRA) Bulletin B-092 which states that a “substantial renovation”, in  effect, refers to a renovation
where at least 90% of the interior of a building (excluding the foundation, external walls, internal
supporting walls, roof, floors and staircases) has been removed or replaced.

9) HST and PURCHASE of RESALE APARTMENT BUILDINGS (Multi-Unit Residential)
No HST will be payable on the price of a resale apartment building (multi-unit residential).  If part of such a building is
commercial, the purchase price must be reasonably apportioned between the part of the building that is
residential resale (HST exempt) and the other part of the building that has a commercial component, which part will
be subject to HST.

10) HST on PURCHASE OF COMMERCIAL PROPERTIES (new or resale commercial properties
closing after July 1, 2010 no matter when an offer was signed)
HST will apply to the purchase price; however, typically, buyers who obtain a GST registration prior to closing
(must be registered for GST in the same manner as ownership will be taken) will not need to pay the HST on
closing provided:
(a) a GST registration is obtained prior to the closing date
and
(b) the buyer signs an appropriate undertaking in the lawyer’s office to become self-assessed.
Note: Watch out for the purchase of office condominiums, industrial condominiums, and retail condominiums,

the price for which will be subject to HST (being subject to only GST on the price for closings prior to July 1, 2010).

11) HST and the PURCHASE OF VACANT LAND
(a) Farmland
HST will typically apply to the price of such land if farm land is sold alone; however, if the land is sold as part of
a farming business, it can be treated differently.  Consult your tax accountant.
(b) Building Lot
HST will typically apply to the price when the seller is involved in a commercial real estate activity; however,
some lot sale prices might be exempt from HST if the seller is not engaged in a real estate commercial activity.
(c) Personal Use Of Vacant Land
No HST is payable if an individual sells personal use vacant land (which would have been exempt from GST).

12) HST on PURCHASES OF NEWLY CONSTRUCTED RESIDENTIAL PROPERTY
(a) Builder’s Agreement Prior to June 19, 2009
No HST is payable if an offer to purchase from a builder was accepted prior to June 19, 2009 (only GST will
apply; however, most builders include GST inside the sale price).  Note: Buying by way of an assignment (where the
builder sale agreement was signed prior to June 19, 2009) becomes attractive!
(b) Builder’s Agreement Accepted after June 18, 2009
If an offer to purchase from a builder was accepted after June 18, 2009 and either occupancy closing (for a new
condo purchase) or final closing occurs prior to July 1, 2010, HST is not  payable;  HST  is  payable  if both 
occupancy (in a new condo purchase) and final closing occur after July 1, 2010.
(c) If Builder’s Agreement Silent about HST
If an offer to purchase from a builder was accepted after June 18, 2009 and failed to make reference to HST, the
sale price includes Ontario’s 8% PST component of the HST if it is payable (which means that the builder must
pay the PST and cannot charge it to the buyer).
(d) GST Rebate (calculated on the 5% GST part of the 13% HST)
Typically, most builders include the GST component of HST (being 5%) in the sale price based on the government
GST rebate being assigned from the buyer to the builder (such GST rebate being 36% of the GST payable on the
first $350,000.00 which is reduced to NIL as the price increases from $350,000.00 to $450,000.00, there being
no GST rebate after $450,000.00).
Note: In order for the GST rebate to be assigned to the builder by the buyer, the buyer must qualify by the buyer
or an immediate family member living in the unit.  If not qualifying (such as an investor who will be renting out the
unit), the rebate cannot be assigned to the builder and the builder will charge the cost of such unassignable rebate to
the buyer on closing in addition to the purchase price, which results in the buyer being forced to make a separate
application to the federal government to recover such rebate.  To qualify for recovery of such rebate, the investor
must own the unit for at least one year and reasonably expect to rent the unit to the initial tenant for one year. 
An investor need not wait the year to apply for and obtain the rebate but if the government later discovers that
ownership was less than one year, the government might seek to recover the rebate paid to the investor.
(e) PST Rebate (calculated on the 8% PST Component of the 13% HST)
Warning: All builder agreements should be reviewed by a lawyer either before a buyer signs an offer or during
any available cooling off period since some builder agreements require buyers to pay the 8% PST (or the
Net PST) component of the HST in addition to the purchase price.
Regarding a PST rebate, only 75% of the 8% PST component of the HST is refundable to a buyer on
the part of the purchase price that is up to $400,000.00 (being newly constructed from a builder since there is 
no HST on resale residential property).  There is no government rebate on the 8% PST for the part of 
any price that exceeds $400,000.00!  This means that 75% of 8% (being 6%) is refundable by the government
and 25% of 8% (being 2%) is not on the first $400,000.00 of price.
Example: If the price from a builder is $500,000.00, the gross 8% PST component of the HST would be
$40,000.00, but since the government offers a rebate of 75% of the 8% PST on the first $400,000.00, this
will effectively (for a qualifying buyer whose immediate family member will be living in the unit) reduce the PST
to 2% on the first $400,000.00 to $8,000.00.  Since there is no PST rebate for that part of the price over
$400,000.00, 8% is charged on the next $100,000.00 being a further $8,000.00 which means (for a qualified
buyer who can assign the rebate to the builder) that the total net PST payable is $16,000.00.  If the net PST is
not included in the price of $500,000.00, the price plus net PST payable becomes $516,000.00.  The gross 8%
PST on $500,000.00 is $40.000.00 but (due to the rebate of $24,000.00 on the first $400,000.00) the net
PST payable is $16,000.00.
Note: If the builder’s agreement requires the Net PST to be paid by the buyer, the buyer pays $16,000.00 on top
of the price.  If the builder’s agreement states that the Net PST is included in the price (as GST is typically with most
builders), the price remains $500,000.00.  Watch out!
Caution: An investor-buyer who will rent out the unit will not qualify for assignment of PST rebate to the builder
and, therefore, on closing, must pay the purchase price of $500,000.00 plus the gross PST of $40,000.00
(being a total of $540,000.00) and then, after closing apply to the government for the rebate of $24,000.00
to be received if the investor qualifies (must be owning for one year and rent to a tenant who is reasonably
expected to live in the unit for one year, although the rebate application can be made as soon as the
purchase from the builder is closed).
(f) Qualifying  for a Rebate (GST or PST) when Buying from a Builder
In order to qualify for GST or PST rebates, the property purchased from a builder must be intended to be a
primary place of residence, which means that if a person has more than one residence in the world, (in order to
qualify for the rebate) the unit must be the main place of residence and not a secondary residence.
Also, the residence purchased must be used as a primary place of residence (as stated above) by the buyer or a
relation of the buyer.  Relation of the buyer includes an individual who is related by blood, marriage, adoption or
common law (including a former spouse or a former common law partner).  Blood relation is limited to parents,
siblings, children, grandchildren but does not include cousins, uncles or aunts.
(g) Additional Transitional PST rebate for NON-CONDOMINIUM Builder Purchase (where
part of construction was done as of July 1, 2010)
If HST is payable on a newly constructed home (not a condominium) and if construction of the residence was 
at least 10% complete as of July 1, 2010, a transitional PST rebate of up to 2% of the sale price can be claimed
on the PST component of the HST as follows: