5% Goods and Services Tax (GST) is applicable to newly constructed properties such as a pre-sale condo sold by a developer or an owner builder home. GST is due at the time of completion. Your notary lawyer will calculate this for you when they prepare the statement of adjustments for the completion.
When you sell your home, you may realize a capital gain. If the property was solely your principal residence for every year you owned it, you do not have to pay tax on the gain. If at any time during the period you owned the property, it was not your principal residence, or solely your principal residence, you may have to report all or part of the capital gain when you file for your tax return.
Does the Property Qualify as your Principal Residence?
A property qualifies as your principal residence for any year if it meets all of the following four conditions:
- It is a housing unit, a leasehold interest in a housing unit, or a share of the capital stock of a co-operative housing corporation you acquire only to get the right to inhabit a housing unit owned by that corporation.
- You own the property alone or jointly with another person.
- You, your current or former spouse or common-law partner, or any of your children lived in it at some time during the year.
- You designate the property as your principal residence.
Please seek advice from a professional accountant when dealing with capital gains on your investments.