Change in Real Estate Law 2022 – HST on assignment sales (Ontario). 楼花转让HST？
One of the changes in Real Estate law in 2022 is that all assignment agreements entered into after MAY 6, 2022, will be subjected to the 13% HST in Ontario.
The 2022 Federal Budget includes an amendment to the Part IX of the Excise Tax Act, Canada which now makes all assignment sales in respect of a newly constructed or substantially renovated single unit residential complex or residential condominium unit taxable and subject to GST/HST.
WHAT IS AN ASSIGNMENT
Assignment is a sales transaction between the owner (original purchaser or the assignor) and the buyer (new purchaser or the assignee) of a newly constructed property. The original owner sells the property to the new buyer before the original buyer closes title on the property with the developer.
WHO PAYS THE HST
All New Home Assignments are now deemed to be a taxable supply to HST and it is payable by the Assignor.
DEPOSITS ARE EXEMPT FROM HST UNDER CONDITIONS
To exempt the deposit from HST, the Assignment Agreement must include a very clearly language that part of the assignment price is the reimbursement of the deposit paid by the original buyer under the purchase agreement. In another words, the writing must clearly state that the assignment price already includes the deposit, so the HST can be exempt. However, HST is payable on any other amount paid to Assignor over and above the deposit.
External link for more resources: Assignment of a Purchase and Sale Agreement for a New House or Condominium Unit