HST Update: Taxation Issues In Real Estate Transactions

This paper provides a brief legislative and case law update on the Harmonized Sales Tax ("HST") and the Goods and Services Tax ("GST") in the context of real estate transactions. The GST/HST are imposed under the Excise Tax Act (Canada) (the "Act").

A. LEGISLATIVE UPDATE

1. British Columbia

On August 26, 2011, it was announced that 54.73% of British Columbians that had voted in the referendum had voted in favour of replacing the 12% HST with the 5% GST and a 7% Provincial Sales Tax.

The British Columbia government immediately announced that the transition is to occur on April 1, 2013. The transitional rules for the HST have been released and are consistent with similar transitional rules on the introduction of the HST in British Columbia and Ontario. British Columbia enacted the new Provincial Sales Tax Act (British Columbia) on May 31, 2012, but not the regulations thereunder. All exemptions under the old Social Services Tax Act (British Columbia) are to