I wanted to touch base to remind everyone that BC’s new HST (Harmonized Sales Tax) is now in effect for goods and services purchased in BC. As of July 1 2010 most goods and services now have a total tax of 12%. The 12% is a combination of the Goods and Services Tax or GST (5%) and Provincial Sales Tax (7%) and is payable on real estate commissions.
For those of you who’s offers were accepted prior to July 1 2010 but who’s sales don’t complete until after July 1 2010 there is a formula that will be applied based on when the bulk of the services were provided and the additional 7% tax will be applied to that respective portion of the commissions. GSt of 5% is applied to the percentage of services provided prior to July 1 2010.
For those of you who do not have an accepted offer as of now, it may prove difficult to justify this argument to Canada Revenue Services, even if you were listed prior to July 1 2010 and my services were in large part provided prior to the July 1 cutoff. In my humble opinion I anticipate that anyone receiving an offer on a property currently listed will incur HST on the full real estate commissions. In this case, your commissions costs will be 7% higher than they were previously when the 5% GST was the only applicable tax on real estate commissions.
Anyone who’s listing commences after July 1 2010 will certainly incur the full 12% HST on the full real estate commissions.
In any case, I strongly encourage you all to consult with your tax accountants on this matter as it seems unclear in the minds of many and there seem to be any number of interpretations in the application of this tax on real estate commissions during this transitional period.
Please contact Shaun with any questions or comments.
HST - the difficult transition
Blog by Mike Cook | July 13th, 2010
Archives
- February 2024
- December 2023
- November 2023
- September 2023
- July 2023
- June 2023
- May 2023
- January 2023
- October 2022
- September 2022
- July 2022
- May 2022
- April 2022
- March 2022
- January 2022
- December 2021
- September 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
- February 2021
- January 2021
- November 2020
- October 2020
- September 2020
- August 2020
- July 2020
- June 2020
- May 2020
- March 2020
- February 2020
- January 2020
- December 2019
- November 2019
- September 2019
- August 2019
- July 2019
- June 2019
- May 2019
- April 2019
- March 2019
- February 2019
- January 2019
- December 2018
- November 2018
- October 2018
- September 2018
- August 2018
- July 2018
- June 2018
- May 2018
- April 2018
- March 2018
- February 2018
- January 2018
- December 2017
- October 2017
- September 2017
- August 2017
- July 2017
- June 2017
- May 2017
- April 2017
- March 2017
- February 2017