Harmonized sales tax ("HST") of 13%
is imposed upon every taxable supply (i.e., sale) of property or
services in Ontario, including commercial real estate.
For commercial real estate, an exception1 applies
where a party making a taxable supply of commercial real property
is not required to collect HST so long as the purchaser is an HST
registrant. The registrant purchaser is responsible for assessing
and directly remitting the HST on the acquisition to the Canada
Revenue Agency. The purchaser then typically claims input tax
credits ("ITCs") to offset the HST
payable and will not be required to remit amounts for HST.
Standard practice in the sale of commercial real property is for
a vendor to obtain a certificate from the purchaser confirming that
it is acquiring the property on its own behalf. The purchaser will
also provide warranties with respect to registrant status,
self-assessment, tax remittance, and applicable indemnities.
