Read the full version of this article to determine if GST/HST is applicable to your purchase and to learn how to avoid GST/HST liability.

Is HST Applicable to my Purchase?

In general, sales of all residential properties that are new or have been substantially renovated are subject to HST based on the full market value of the property. On the contrary, the sale of a previously occupied residential property is typically exempt from HST. This exemption applies in most cases where previously occupied housing is sold. In particular, it applies to a resale of an individual’s personal residence and a resale of rental housing by a person other than a builder. This exemption from HST applies even if the housing is used partly for commercial purposes, as long as it is used “primarily” (that is, more than 50%) as a place of residence. If not used primarily as a place of residence, only the residential portion qualifies as being exempt from HST. This exemption from HST does not apply to the sale of housing that had been used by the seller in the course of a commercial activity or if the seller has claimed input tax credits on all or part of the costs of acquisition or capital improvements made to the property.

What Can the Purchaser Do To Avoid HST Liability?

To be protected from HST liability on the purchase of real property where a seller asserts that the sale is exempt from HST, the purchaser should obtain a written representation in the purchase contract that the sale is exempt from HST. Further, the purchaser should require, as a condition of the sale, that the seller provide a certificate stating that the property is an exempt supply. If the certification is incorrect and the transaction is not exempt from HST, the purchaser will generally not be liable for the HST. Note, however, that the purchaser will not be afforded this protection if the purchaser “knows or ought to know that the supply is not an exempt supply”.

Purchasers of New or Substantially Renovated Property?

In general, sales of all residential properties that are new or have been substantially renovated are taxable based on the full market value of the property. For purchasers of new or substantially renovated properties the question then becomes:

Is HST Included in the Purchase Price?

The way that builders market their developments with HST varies considerably and can make comparing property prices confusing. To add to this confusion some builders are prepared to accept an assignment of a purchaser’s HST rebate while others will not. As such, Purchasers need to be cautious in determining whether a developer’s market prices exclude or include HST and whether they include the full HST or HST net of an assigned rebate.

Base Purchase Price Plus HST

Some builders list a base purchase price and then advise purchasers that the HST is an extra cost. This is perhaps the most transparent form of HST marketing. The purchaser is simply left to calculate the HST applicable and to add it to the purchase price. If a purchaser qualifies for a rebate, then the purchaser should determine if the builder is willing to accept an assignment of the rebate. If so, the Purchaser will pay only the net HST instead of paying the full HST and applying to receive the rebate after the purchase transaction is complete An important distinction between these two options is the implication to a Purchasers closing costs.If the Purchaser is left to apply for the rebate after the purchase transaction is complete, then a Purchaser’s out-of-pocket costs will be higher until the HST rebate application is processed.

HST Included in the Purchase Price

Purchasers need to be wary of purchase prices that include HST. When comparing prices that purport to include HST, purchasers must be sure to clarify if those prices include the full HST or the net HST. Some builders market their homes with the full HST included and advise purchasers that they can apply for a partial HST rebate if they qualify. This is a more transparent means of marketing prices, but may give the impression of a high purchase price given that most purchasers will qualify for a rebate. More commonly builders market the property with the net HST included. This situation leads to complicated provisions in the purchase contract and requires special attention by purchasers and their agents. In these cases, the purchase contract states that the purchase price includes the non-rebated portion of the HST and that the purchaser will assign the HST rebate to the builder. This is fine for most purchasers who qualify for the rebate, but purchasers who may not qualify for the rebate should be cautious. In the latter situation, the builder will often require that the non-qualifying purchaser pay an amount equal to the amount of the HST rebate above and beyond the stated purchase price.

Property Transfer Tax

Property Transfer Tax Exemptions

First Time Home Buyers’ Program

Exemptions for the Transfer of a Principal Residence

Exemptions for the Transfer of a Recreational Residence

Use the Right Professionals

Many home buyers should seek professional assistance through the home buying process. The following professionals are integral to the home buying process.

Real Estate Agents

New home buyers should consider hiring a real estate agent to help them locate suitable properties and negotiate the terms of the offer to purchase. Real estate agents are specifically trained to provide advice on price and terms of your offer, and have many tools at their disposal for searching for your perfect home. In most cases a home buyer’s real estate agent will be paid by the listing (selling) real estate agent.

Mortgage Brokers

While traditionally home buyers approach banks directly to get a mortgage for their new home, it is advisable for a new home buyer to seek the professional advice of a mortgage broker. Mortgage brokers work with many different banks and financial institutions and can help to customize the best mortgage for you. In most cases, mortgage brokers are paid by the bank or financial institution that provides your mortgage.

Lawyers

It is recommended that new home buyers seek the professional advice of a lawyer early in the home buying process. Lawyers can advise on the common legal pitfalls of these complex transactions and can help to protect your interests throughout the process. Many lawyers offer fixed fees for standard real estate transactions ranging from $1000 to $1500 for a purchase of a home with a new mortgage.

Learn how you can get the services of all of these real estate professionals under one roof by clicking here.

Know Your Budget

Before you start looking at homes it is important to prepare a detailed budget. A qualified mortgage broker can assist you in preparing a budget and identifying the “hidden costs” of buying a new home. In addition, ask your mortgage broker to obtain a preapproval from a lending institution so that you know exactly how much you can borrow before you begin your home search.

Make Your Offer “Conditional”

It is important to make your offer to buy a new home “conditional”. This means that before your offer to purchase becomes legally binding on you, you will be provided with an opportunity to make certain inquires and investigations to be sure that the home is right for you. Some typical conditions are as follows:

1. Subject to new mortgage financing acceptable to you;
2. Subject to your lawyer’s review of the purchase contract;
3. Subject to your lawyer’s review of title to the home;
4. Subject to your review of a property disclosure statement to be provided by the seller;
5. Subject to a house inspection;
6. If strata titled home, subject to your lawyer’s review of the strata documents.

Contact a lawyer for more details on the conditions to be included in your offer to purchase by clicking here.

Get a Home Inspection

It is recommended that you seek the advice of a professional home inspector if you decide to purchase a previously-owned home. Sellers are generally not responsible for disclosing defects in the home and will often be very reluctant to give any legal representations on the condition of the home. As such, it is incumbent as the buyer to do your own investigations. A qualified home inspector can help to identify defects in the home, which may affect your purchase decision.

Think About the Future

Home ownership is an investment for the future. When considering homes, consider the resale value of the house several years from now. Your real estate agent can help you to identify those characteristics of the market that can help to ensure that your home appreciates in value over time.

Take Advantage of Government Offers

Home buyers, especially first time home buyers, have government programs to assist with buying a new home. For example, first time home buyers may be exempt from paying the British Columbia Property Transfer Tax (PTT). Consult with your lawyer and real estate agent early in the home buying process to learn of the financial assistance that may be applicable to your new home purchase.

Ask Questions

At the end of the day, the best thing that you can do as a new home buyer is ask lots of questions! Many first time home buyers will be afraid to ask questions out of fear of looking foolish or uninformed. Instead, they end up making expensive mistakes that could have easily been avoided. The professionals that you are working with are there to support you throughout the home buying process – use them to your advantage. If you don’t understand something, ask!

Contact our office at 250-448-5566 or via email at convey@lglaw.ca to discuss being a first time home buyer in the Okanagan!

This following summarizes some of the key benefits and costs of forming a PREC.

A. BENEFITS OF FORMING A PREC

1. Limited Liability For Licensees

A PREC is a corporation and as such, it is treated as a separate legal person from its owners. This separation of business and personal identities is the main reason that corporations are the preferred business organization for most business owners. Generally, owners of corporations are not personally liable for the Corporation’s business dealings. However, there is an important exception to this general rule as it applies to PREC’s. Pursuant to the Real Estate Services Act, the fact that a realtor is carrying on business as a PREC does not affect the realtor’s individual liability with respect to the provision of real estate services or his or her duties to clients. That is, a realtor is personally liable for his or her negligent performance of real estate services despite the fact that the realtor is carrying on business as a PREC.

Despite this important exception, a properly incorporated PREC can be a highly effective tool for protecting a realtor’s personal assets from liabilities that the business may incur that are not in connection with the provision of real estate services. This is particularly significant having regard to the fact that a realtor’s errors and omissions insurance does not cover these types of risks.

For example, a PREC would serve as a barrier to personal liability for the following business liabilities: business loans, some employee obligations, some workers compensation obligations, some business tax obligations and supplier or other creditor obligations.

2. Income Splitting

A PREC offers a flexible means of shared ownership. The Real Estate Services Act permits realtors, their spouses and children to own shares in the PREC. At the time a PREC is incorporated, family members may be issued shares in the PREC for nominal value. As shareholders of the PREC, these family members are entitled to profits from the PREC, even if they do not actively participate in the business. This ability to allocate profits from the PREC to family members in lower marginal tax brackets can produce significant tax advantages for a realtor and his or her family.

The following represents a simplistic analysis of the tax savings that may be achieved through income splitting assuming $80,000 in net business income in a given year.

The above analysis assumes that neither spouse has income from other sources and may be affected by many variables in each person’s individual tax position and financial planning objectives.

3. Tax Deferral

The income generated by the PREC is taxed in the hands of the PREC, not the owners. Owners of a PREC do not pay any income tax until the profits of the PREC are actually distributed in the form of dividends. Although the PREC must pay tax on its income in the year it is earned, the owners may generally determine the timing of distributions of profits from the PREC, allowing owners to defer the payment of tax until such a time as it suits them.

B. COSTS OF FORMING A PERSONAL REAL ESTATE CORPORATION

1. Incorporation Costs – $900

Although the costs of incorporating a PREC may vary between lawyers, Business Law Group charges a fixed fee of $900 to incorporate a PREC. This fixed fee includes all of the registration fees and administrative costs associated with the incorporation.

2. Name Change Fee – $25

The Real Estate Council charges a fee of $25 to change the name of your license from your personal name to the name of your PREC.

3. Annual Maintenance and Corporate Returns – $250/year

PREC’s are required to maintain corporate records and file an annual return with the corporate registry. Although the costs may vary between lawyers, Business Law Group charges a fixed annual fee of $250 to maintain the PREC records book and file its annual corporate returns. This fixed fee includes all of the registration fees and administrative costs. Alternatively, you may also elect to maintain your own record book and complete the annual returns for the PREC yourself, in which case the expected costs would be $50/year.

4. Corporate Income Tax Return – $500/year

As a separate legal entity, your PREC will be required to file its own tax return. A reasonable expectation of costs for an accountant or bookkeeper to prepare a corporate tax return is $500. Alternatively, you may elect to prepare the corporate tax return yourself, in which case there would be no additional costs. It is important to recognize that this additional cost may be offset by a reduced cost of preparing your individual tax return, which would be much less complicated if your business was carried on by the PREC.

5. Real Estate Fees – $1,175/2 years

Your PREC will be required to pay the single fee payable to the Real Estate Council on account of licensing fees, errors & omissions insurance and special compensation fund assessments every two years. This is in addition to the fee of $1,175 that is paid by you as the controlling individual of the PREC.

Please contact Business Law Group for a free consultation regarding the incorporation of a PREC.

Generally, HST will be payable by the purchaser of new residential property where possession and ownership of the property is transferred after July 1, 2010. The result is a higher tax rate for purchasers of new homes. For example, the purchaser of a new home in the amount of $500,000 would be subject to 5% Goods and Services Tax (GST) prior to the effective date and 12% HST thereafter, which is an increase of $35,000 in tax payable on the purchase.

Fortunately, there are a number of ways that a purchaser can minimize the net increase in tax payable. The following represents a summary of the common rebates and transitional rules that may apply to the purchase of your new home.

Your purchase of a new residential property may be “grandparented” in which case the provincial 7% component of the tax may not be applicable. Generally, purchases of new residential homes will be grandparented where the written agreements of purchase and sale are entered into before November 18, 2009 and ownership is transferred under the agreement after June 2010.

Sales of these grandparented homes would not be eligible for the GST/HST New Housing Rebate or the GST/HST New Rental Housing Rebate.

Grandparenting does not apply equally to all forms of residential property. Contact Us to assist you in determining if your purchase of residential property may be grandfathered.

Effective July 1, 2010, purchasers of new residential property for the purpose of principal residency may be eligible for a rebate of 71.43% of the provincial component of the HST paid, up to a maximum of $26,250.

For example, a purchaser of new residential property with a purchase price of $500,000 will pay 7% or $35,000 for the provincial component of the HST. The purchaser may be eligible to a rebate equal to 71.43% of $35,000, or $25,000.

The GST/HST New Housing Rebate will often be credited by the builder of your new home at closing, in which case you will only be required to pay the builder the net amount of HST payable on the transaction. Alternatively you may have to pay the full HST to the builder at closing and apply for the GST/HST New Housing Rebate yourself.

Contact Us to determine your eligibility for the GST/HST Rebate on the purchase of your new residential property or to assist with claiming the rebate yourself.

Effective July 1, 2010, purchasers of new residential property for the purpose of renting to a tenant may be eligible for a rebate of 71.43 per cent of the provincial component of the HST paid, up to a maximum of $26,250.

For example, a purchaser of new residential property with a purchase price of $500,000 will pay 7% or $35,000 for the provincial component of the HST. The purchaser may be eligible to a rebate equal to 71.43% of $35,000, or $25,000.

Your eligibility for this rebate will depend on a number of factors including the type of property, your intent to rent the property at the time of purchase and the first use of the property as a rental property. The eligibility criteria for the GST/HST New Residential Rental Property Rebate are technical and should be explained to you by a lawyer when making your application.

Unlike the GST/HST New Residential Rental Property Rebate, which is often assigned to the builder at closing and credited to the purchaser, the GST/HST New Residential Rental Property Rebate must be applied for after the closing of the sale and the occupancy of the property by a tenant.

Contact Us to determine your eligibility for the GST/HST New Residential Rental Property Rebate on the purchase of your new residential property or to assist with completing the application package.

Purchasers of new residential property who are subject to the provincial component of the HST after June 2010, may be eligible for a PST Transitional New Housing Rebate to provide relief in respect of the PST embedded in the price of the home.

Generally, the PST Transitional New Housing Rebate is calculated as a proportion of the estimated embedded PST in the residential property, based on the degree of completion of construction of the home as of July 1, 2010.

Eligible applicants would be permitted to calculate the estimated embedded PST by choosing one of the following two methods:

1. $60.00 per square metre of floor space; or
2. 2% of the total value established for GST purposes.

The PST Transitional New Housing Rebate is administered by the CRA. Purchasers have the option of obtaining the PST Transitional New Housing Rebate through the builder or by filing an application directly with the CRA. Where the purchaser files the application, they are required to obtain from the builder of the home a certification of the percentage of completion of the newly constructed or substantially renovated home as of July 1, 2010. As a condition for obtaining the rebate, your builder will be required to obtain a clearance certificate from the province and attach it to the first PST Transitional New Housing Rebate application submitted to the CRA. Generally, the application for the PST Transitional New Housing Rebate needs to be filed before July 1, 2014.

Your eligibility for the PST Transitional New Housing Rebate will not affect your ability to claim the GST/HST New Housing Rebate or GST/HST New Residential Rental Property Rebate.

Contact Us to determine your eligibility for the PST Transitional New Housing Rebate on the purchase of your new residential property or to assist you with completing the application package.

Summary Table – Transitional Rules

GST/HST New Housing Rebate

Effective July 1, 2010, purchasers of new residential property for the purpose of principal residency may be eligible for a rebate of 71.43 per cent of the provincial component of the HST paid, up to a maximum of $26,250.

For example, a purchaser of new residential property with a purchase price of $500,000 will pay 7% or $35,000 for the provincial component of the HST. The purchaser may be eligible to a rebate equal to 71.43% of 35,000, or $25,000.

The GST/HST New Housing Rebate will often be credited by the builder of your new home at closing, in which case you will only be required to pay the builder the net amount of HST payable on the transaction. Alternatively you may have to pay the full HST to the builder at closing and apply for the GST/HST New Housing Rebate yourself.

Contact Us to determine your eligibility for the GST/HST Rebate on the purchase of your new residential property or to assist with claiming the rebate yourself.

GST/HST New Residential Rental Property Rebate

Effective July 1, 2010, purchasers of new residential property for the purpose of renting to a tenant may be eligible for a rebate of 71.43 per cent of the provincial component of the HST paid, up to a maximum of $26,250.

For example, a purchaser of new residential property with a purchase price of $500,000 will pay 7% or $35,000 for the provincial component of the HST. The purchaser may be eligible to a rebate equal to 71.43% of 35,000, or $25,000.

Your eligibility for this rebate will depend on a number of factors including the type of property, your intent to rent the property at the time of purchase and the first use of the property as a rental property. The eligibility criteria for the GST/HST New Residential Rental Property Rebate are technical and should be explained to you by a lawyer when making your application.

Unlike the GST/HST New Residential Rental Property Rebate, which is often assigned to the builder at closing and credited to the purchaser, the GST/HST New Residential Rental Property Rebate must be applied for after the closing of the sale and the occupancy of the property by a tenant.

Contact Us to determine your eligibility for the GST/HST New Residential Rental Property Rebate on the purchase of your new residential property or to assist with completing the application package.

PST Transitional New Housing Rebate

Purchasers of new residential property whom are subject to the provincial component of the HST after June 2010, may be eligible for a PST Transitional New Housing Rebate to provide relief in respect of the PST embedded in the price of the home.

Generally, the PST Transitional New Housing Rebate is calculated as a proportion of the estimated embedded PST in the residential property, based on the degree of completion of the construction of the home as of July 1, 2010.

Eligible applicants would be permitted to calculate the estimated embedded PST by choosing one of the following two methods:

1. $60.00 per square metre of floor space; or
2. 2% of the total value established for GST purposes.

The PST Transitional New Housing Rebate is administered by CRA. Purchasers have the option of obtaining the PST Transitional New Housing Rebate through the builder or by filing an application directly with the CRA. Where the purchaser files the application they are required to obtain from the builder of the home a certification of the percentage of completion of the newly constructed or substantially renovated home as of July 1, 2010. As a condition for obtaining the rebate, your builder will be required to obtain a clearance certificate from the province and attach it to the first PST Transitional New Housing Rebate application submitted to the CRA. Generally, the application for the PST Transitional New Housing Rebate needs to be filed before July 1, 2014.

Your eligibility for the PST Transitional New Housing Rebate will not affect your ability to claim the GST/HST New Housing Rebate or GST/HST New Residential Rental Property Rebate.

Contact Us to determine your eligibility for the PST Transitional New Housing Rebate on the purchase of your new residential property or to assist you with completing the application package.

Resources

GST/HST New Housing Rebate – Application

GST/HST New Housing Rebate – Instruction Guide

GST/HST New Residential Rental Property Rebate – Application

GST/HST New Residential Rental Property Rebate – Instruction Guide

GST/HST Transitional Rebate – Application

Property Transfer Tax is a one-time tax payable by the purchaser at closing should not be confused with Property Tax, which is paid annually by property owners to local governments.

What is the Property Transfer Tax Rate?

The tax rate is 1% on the first $200,000 of the fair market value of the property, plus 2% on the fair market value over $200,000.

For example, if the fair market value of the property is $500,000, then the tax is 1% of $200,000 ($2,000) plus 2% of the remaining $300,000 ($6,000) for a total tax of $8,000.

When is Property Transfer Tax Payable?

Property Transfer Tax is paid on the closing date of a residential transaction. In most cases your lawyer will complete the Property Transfer Tax return and remit the required amount on your behalf.

Is My Transaction Subject to Property Transfer Tax?

Generally speaking, all residential property transactions are subject to Property Transfer Tax unless the purchaser qualifies for an exemption. See a list of common exemptions under the heading “Other Common Exemptions” below.

First Time Home Buyer’s Exemption from Property Transfer Tax

The First Time Home Buyers’ Program exempts qualified home buyers from paying Property Transfer Tax. Under the program, eligible purchasers can claim an exemption from Property Transfer Tax if the fair market value of the home is less than $425,000. A proportional exemption is provided for eligible residences with a fair market value of up to $25,000 above the threshold (i.e. up to $450,000).

To qualify for the First Time Home Buyers’ exemption, you must meet all of the initial eligibility criteria. To retain the exemption, there are also requirements which must be met in the year following the transfer.

Contact Us to assist you in determining your qualification for the First Time Home Buyer’s Program

Other Common Exemptions

Some other commonly claimed exemptions for residential real estate transactions are as follows:
- transfers of principal residences amoung certain family members
- transfers involving Joint Tenants & Tenants in Common
- transfers involving an agreement for sale
- transfers resulting from marriage breakdowns

Contact Us to assist you in determining your qualification for an exemption from Property Transfer Tax

Resources

Property Transfer Tax (British Columbia) – First Time Homebuyers Guide

Property Transfer Tax (British Columbia) – Instruction Guide

Property Transfer Tax (British Columbia) – First Time Homebuyers Sample Return

The following represents a summary of the implications of the HST to builders and developers:

Rebates to Purchasers

Generally speaking, purchasers of new housing will be eligible for rebates on the provincial component of the HST paid for all types of housing previously eligible for GST new housing rebates. The new housing rebate is 71.43% of the provincial component of the HST paid for qualifying housing, up to a maximum amount of $26,250. Assuming the amount of PST, on average, embedded in the selling price of a new home is 2%, purchasers of homes priced up to $525,000 pay no more tax, on average, than the former GST/PST regime.

Builder’s Self Supply of Residential Rental Property

Builders who rent out new homes are required to pay GST under the self-supply rules if the rental occurred before July 2010, and will be required to self-assess and pay the HST under the self supply rules where the self-supply occurs after June 2010. However, under the new HST regime, builders of certain types of residential rental properties who are required to self-asses for HST may be eligible for the enhanced GST/HST New Rental Housing Rebate. The GST/HST New Rental Housing Rebate is 71.43% of the provincial component of the HST paid for qualifying housing, up to a maximum amount of $26,250.

The GST/HST New Rental Housing Rebate is federally administered in a manner similar to the GST rebate for new residential rental properties. Builder landlords will be able to apply for the rebate by filing a rebate application with the Canada Revenue Agency (CRA).

Builders required to self-assess and pay GST under the self-supply rules before July 2010 are not required to pay the provincial component of the HST.

Grandparenting Rules

Generally, sales of newly constructed or substantially renovated homes are grandparented where the written agreements are entered before November 18, 2009. Sales of these grandparented homes are not eligible for the GST/HST New Housing Rebate or GST/HST New Rental Housing Rebate.

Builders who are registrants for GST/HST purposes may recover the provincial component of the HST paid on most purchases through input tax credits (ITCs) on materials paid for after July 1, 2010. Where the construction of a grandparented home straddles the July 1 commencement date, builders must pay a transitional tax adjustment in order to compensate for the fact that sales of grandparented homes will not be subject to HST. The amount of transitional tax payable by builders of single-unit housing varies, but is intended to approximate the amount of PST embedded in the price of the home before July 1, 2010. The amount of transitional tax payable by builders of condominium units is 2% of the value of consideration for the condominium unit as established for GST purposes. In both cases, this amount is reduced depending on the level of completion at July 1, 2010.

Transitional Rules

New homes completed in full or in part before July 2010 will have PST embedded in the price of the homes since building materials used in the construction of homes are subject to PST. In this case, a PST Transitional New Housing Rebate may be available to provide relief in respect of the PST embedded in the price of the home. In the case of most single-unit forms of housing, the PST Transitional New Housing Rebate is available to the purchaser through the builder or by the purchaser filing an application directly with the CRA. In the case of residential condominiums, the PST Transitional New Housing Rebate is available to the builder rather than the purchaser.

Eligible applicants may calculate the estimated embedded PST by choosing one of the following two methods:

1. $60.00 per square metre of floor space; or
2. 2% of the total value established for GST purposes.

Eligibility for the PST Transitional New Housing Rebate does not affect the purchaser’s or builder’s ability to claim the GST/HST New Housing Rebate or GST/HST New Rental Housing Rebate.

As a condition for obtaining the PST Transitional New Housing Rebate, builders must obtain a clearance certificate from the province and attach it to the first PST Transitional New Housing Rebate application submitted to the CRA. Subsequent PST Transitional New Housing Rebate applications submitted to the CRA by the builder will be processed based on the clearance certificate submitted with the first rebate application.

Generally, the application for the rebate needs to be filed before July 1, 2014. Where the builder is unable to file their rebate application within this timeframe due to extenuating circumstances (such as a delay in completing the sale of a home), the builder may make a request in writing for an extension of the timeframe to file the rebate, provided the request for extension is received by the CRA before July 1, 2014.

Builder Disclosure Requirements for Transitional Period

If a written agreement is entered into after November 18, 2009 and before July 1, 2010, the builder is required to disclose in the written agreement whether HST applies to the sale and, if so, whether the price in the agreement includes the applicable provincial component of the HST, net of the GST/HST New Housing Rebate and the PST Transitional New Housing Rebate, if applicable.

If the transaction is subject to the provincial component of the HST and the builder did not make a disclosure as outlined above, the stated price in the written agreement would be deemed to include the provincial component of the HST. In such a case, the purchaser would not be required to pay the provincial component of the HST in addition to the stated price in the agreement.

In the case of Joint Tenants, a surviving owner will acquire the interests of the deceased owner thereby increasing the surviving owner’s interest in the property. In this case, the surviving owner is said to have the Right of Survivorship.

In the case of Tenants in Common, a surviving owner does not, by virtue of the Tenancy in Common, acquire the interests of the deceased owner. In this case, the surviving owner does not have a Right of Survivorship. The deceased owner’s interest in the property will be considered part of the deceased owner’s estate upon death.

By way of example:

If Jane and Pat own a house as Joint Tenants, then Jane’s interest in the property will automatically pass to Pat upon Jane’s death thereby increasing Pat’s interest in the property.

If Jane and Pat own a house as Tenants in Common, then Jane’s interest in the property will pass to Jane’s estate upon her death. As such, Pat’s interest in the property will not increase upon Jane’s death.