Do you know if you need to charge GST when you sell your property in BC?

Selling a home in BC is stressful enough without surprise tax questions. One of the biggest and most overlooked tax issues is GST (Goods and Services Tax). By the time you get to closing, it’s often very late in the process to figure this out. Many clients are shocked (and annoyed) to discover that GST may apply to their transaction.

Here’s what you need to know.

TLDREvery property sale in BC is GST-taxable unless it falls under a specific exemption. Used homes are often exempt, but new builds, major renovations, subdivisions, and commercial properties usually are not. Notaries and lawyers cannot advise you on GST. If you aren’t 100% sure whether GST applies to your sale, you must contact your accountant immediately—otherwise, you risk being on the hook for tens of thousands of dollars.

Start with the basic rule

Here’s a very important underlying rule when considering whether you need to charge GST on the sale of your property:

In Canada, every sale of property is GST-taxable unless it falls under an exemption. That means the question isn’t “Does GST apply?” but rather “Does my sale qualify for an exemption?”

When GST usually does NOT apply

Most ordinary home sales are exempt. Common exemptions include:

  • Used homes: If your house, condo, or townhouse has been lived in before, and you’re not a builder or developer, the sale is usually exempt.
  • Personal-use land: If you’re selling land that you bought and used only for personal enjoyment (for example, your family cabin lot or an extra piece of yard you never developed), GST may not apply.
  • Resale of rental properties: If you’re selling a residential rental property that’s been used as a rental for some time, it may also be exempt.

CRA has some older reading materials on whether you need to charge GST on the sale of your real property, but it is your obligation to understand whether this information is current for your purposes and whether it applies to your situation. The only way you can really tell what you need to do for your specific situation is to talk to your accountant.

When GST usually DOES apply

GST is often payable in these situations:

  • New construction: If you’re selling a brand-new house, condo, or other property that hasn’t been lived in.
  • Substantial renovations: If you’ve renovated so much that the home is basically new again.
  • Builders and developers: If you build, rebuild, or subdivide property with the intention of selling.
  • Commercial property: Office buildings, stores, farmland used for business, or other income-producing land.

As noted above, only your accountant can give you specific advice about whether GST applies to your specific situation. Call them as soon as you list the property for sale.

Why this matters

GST is 5% of the sale price. On a $700,000 home, that’s $35,000. If you haven’t budgeted for it, you can end up with a nasty surprise—and sometimes even a lawsuit—after the fact.

Many Realtors will put a clause in your contract saying some version of “The parties are each advised to seek professional advice on whether they should charge GST on this transaction.”

DO NOT IGNORE this clause. Too often, buyers and sellers just skim over it, remove the subject, and assume everything is fine because “no one said anything”. By the time the deal gets to us, there may be only days (or hours) left to sort it out.

Here’s the bottom line

We cannot tell you whether you should charge GST on the sale of your property. That is a decision only you can make. Notaries and conveyancing lawyers are not trained to give GST advice. You, and you alone, are responsible for finding out the answer to this question. We strongly recommend you ask your accountant about how and whether GST applies to your sale when you list the property for sale. You DO NOT want to be trying to sort this out at closing.

If you are not 100% sure about your situation, you must:

  • Contact your accountant immediately.
  • If you don’t have an accountant, hire one now—before closing.

Do not assume that “used home = no GST” or that “nobody mentioned it so it must be fine.” The CRA has clear rules, and you could end up on the hook for tens of thousands of dollars.

Key takeaway

Every property sale starts as GST-taxable, and it’s up to you to prove there’s an exemption. If you have any doubt, bring in your accountant right away.

In Closing

Contact us if you have questions when you are listing your property for sale. We’d be happy to give you general information, or refer you to an accountant for specific advice, if you don’t already have one.

FAQs – How do I know if I have to charge GST on property I am selling in BC?

Probably not—most used residential homes are exempt. But the exemption depends on your specific facts, and only your accountant can confirm.

If the renovations are so extensive that the home is considered “substantially renovated,” GST could apply even if it’s not brand new.

It depends. If you are an individual selling land you held for personal use, it may be exempt. If you subdivided, developed, or used it in a business, GST could apply.

The buyer usually pays GST at closing, but if it turns out GST should have applied and wasn’t collected, CRA can go after the seller.

No. Notaries and conveyancing lawyers have general knowledge about GST and other taxes, but they are not GST experts. You need to talk to an accountant for clear advice.

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