Tax Sale Guide Home
Hst Resale Vacation Land
Chapter: TAX SALES AS A BUSINESS
Dave2
There seems to be some confusion as to whether HST is to be charged on resale of vacation land in Ontario. I have seen differing so called expert opinions
Netpred
My limited tax knowledge suggests that HST would be payable if GST was payable pre July 1, 2010. Used residential properties are generally exempt as is vacant residential land (this normally includes vacant vacation property). However, if it is a business/commercial property HST would be payable. In most cases where HST is payable the net tax consequence would be zero if the property was purchased by a registrant since the purchaser would receive an input tax credit in the amount of HST that would be payable. In fact, I believe that a declaration could be signed to this effect which would mean that no HST would be charged and no input tax credit would enure if both the vendor and purchaser are registrants.
New1
Guys, can you claim (or write off) lost deposit $$$ from Rev Canada, in your incomeTax?
Frank
If you are buying this as a business, whether it is incorporated or not, I believe you can deduct it as a business expense, that would go for deposit costs, searches, travel costs to do your research, etc...(I don't think you can include bribes to Municipal Officials).
The down-side of running it as a business is that you will pay full taxes on any profits you make from your ventures, as opposed to buying the occasional property, as a hobby, and realizing some capital gains and therefore only paying taxes on half of the gains.