hst

[Harley]

I have a question that if you purchase  a vacant parcel of land through a tax sale, does HST have to be paid on it and does it make a difference if it is a personal person buying it or a corporation. I  was finnally successful at bidding a tax sale and was surprised at HST being added and my real estate friend said for personal use, there should not have been HST.

[g2020]

HST has to be paid on Tax Sale property regardless of whether the purchaser is a person or a corporation. In either case if the purchaser is an H.S.T. Registrant then they must self assess and provide satisfactory indemnification and undertakings to the municipality. If the tax sale property contains one or more residential dwellings then you may be entitled to a full or partial rebate. The municipality cannot be expected to know if there is a used residential dwelling on the property at the time of the tax sale, and the extent to which the land that is being sold is required for the use and enjoyment of the dwelling. Your realtor friend may be referring to the exemption for personal use property, but in the case of a tax sale there is no such thing. You may do the arithmetic and find that you are better off not being a registrant. If you buy too many tax sale properties in two short a period of time, and are not a registrant, you may just find that you get to remit twice on the same property as the result of an audit. Watch out for the natural realtor propensity to tell you what you want to hear - they are not the ones who get to pay the penalty. He is no doubt well intentioned, but tax sales are a special situation.