Do I Have to Pay HST When Selling a New Build? Pay Attention — 13% Can Change the Deal in Georgetown

Do I have to pay HST when selling a new build?

Do I Have to Pay HST When Selling a New Build? Read This First

Quick answer: If you’re the builder or a business selling a newly constructed home, yes — HST applies (Ontario rate is 13%). If you’re a regular homeowner selling a used property, you usually don’t pay HST. There are important exceptions — assignment sales, self-built homes, and certain land sales can trigger HST. Read on for clear, local steps you can act on today.

Why this matters in Georgetown, ON

Georgetown is moving fast. New subdivisions, buyers who want turnkey homes, and investors watching pre-construction opportunities make HST a real cash factor. A 13% tax can change whether your listing is competitive or dead on arrival.

I’ll give direct rules, local examples, and a clean checklist so you know whether HST will hit your sale and what to do next.

The rule in one line

• If the property is “new” for tax purposes and you’re the vendor (a builder or a registrant), you must charge HST on the sale price at 13% in Ontario.
• If the property is a used residential property sold by a private homeowner, it’s normally exempt from HST.

What counts as a “new build” for HST?

• Newly constructed houses, condos, and townhomes sold for the first time by the builder.
• Substantially renovated homes sold after renovation as essentially new.
• Assignment of a pre-construction purchase contract (often taxable).
• Homes you built or substantially renovated where tax rules treat you like the builder (self-supply rules).

If the home was occupied and used as a residence before the sale, it’s less likely to be considered new — but there are details. Always confirm with a tax professional or CRA resources.

Common Georgetown scenarios — and the tax outcome

1) Bought from the builder, lived in the home, now selling (normal resale)

• Outcome: Generally exempt from HST. You’re selling used residential real estate.
• Action: Market as a non-taxable sale. No HST collection.

2) You are a builder or developer selling a newly built lot or house

• Outcome: HST applies at 13% on the sale. You must be registered for HST and remit the tax.
• Action: Price to include HST, issue proper invoices, and file returns.

3) Assignment of a pre-construction contract in Georgetown (you flip the contract before closing)

• Outcome: Often taxable. The assignment payment can be subject to HST because it’s considered a taxable supply.
• Action: Get tax advice and disclose tax status in the assignment agreement.

4) You built or substantially renovated the house yourself and now sell it

• Outcome: Self-supply rules may apply and HST can be triggered.
• Action: Consult an accountant to determine whether you need to register and remit HST.

5) Selling vacant residential land or land intended for development

• Outcome: Vacant land and land sold for development can be taxable.
• Action: Treat land sales cautiously. Confirm tax obligations.

How big can this hit be? A simple example

Picture a brand new house listed at $800,000 in Georgetown.

• HST at 13% = $104,000.
• If the seller is required to collect HST, buyers will need to pay $904,000 (unless a rebate applies).

That’s not a small number. If you fail to factor HST into pricing, negotiations break down and deals get cancelled.

HST New Housing Rebate — what sellers should know

Buyers of new homes may qualify for a new housing rebate that reduces the effective HST they pay. That rebate applies to qualifying owner-occupiers and has conditions.

Important for sellers:

• Don’t assume the buyer’s rebate changes your obligation to collect HST.
• The rebate is claimed by the buyer or on closing through adjustments depending on how the transaction is structured.
• Always encourage buyers to check rebate eligibility with CRA or their accountant.

Practical checklist for sellers in Georgetown

1. Identify your status: Are you the original builder, an assignee, or a regular homeowner? This determines tax treatment.
2. Consult an HST specialist or accountant before listing if the property is new or was renovated.
3. Add a clear tax clause in your listing and agreement of purchase and sale: show whether price includes HST or HST will be added.
4. If you are required to collect HST, register and file timely returns. Penalties can be severe.
5. If you’re selling an assignment, get written confirmation on tax status and deposit handling.
6. Disclose to buyers—buyers must know whether their purchase will include HST or if they can claim a rebate.
7. Keep detailed invoices and records for construction costs, renovations, and GST/HST filings.

Local negotiation tips — keep the deal alive

• If HST applies, break out the HST on the schedule so buyers see the base price and tax separately.
• Consider pricing slightly lower if you must collect HST to stay competitive against resales.
• For assignment sales, be transparent early — buyers in Georgetown expect clarity on tax exposure.

Example email script to use with buyers or lawyers

“Per CRA rules, this property is being sold as a newly constructed home and is therefore subject to HST at 13%. The sale price listed does not include HST. Please confirm in writing whether the buyer intends to apply for the new housing rebate and provide contact details for their tax advisor.”

Use this in offers, MLS remarks, and communications with your lawyer.

When to call the tax professionals — quick triggers

• You’re a developer or builder closing multiple units.
• The sale involves an assignment before closing.
• You built or substantially renovated the home and are unsure of “self-supply” rules.
• The sale includes a mix of residential and commercial space.

Get an accountant who understands real estate HST in Ontario. Small mistakes cost tens of thousands.

Closing: What sellers in Georgetown must never forget

HST on new builds is simple in principle: builders charge it; private resales usually don’t. But real life throws curves — assignments, self-supply, vacant land, and renovations can make a sale taxable. Price proactively, disclose clearly, and get tax advice before you list.

If you want a practical review of your specific sale and a local pricing strategy that factors tax correctly, reach out for a direct consult. I’ll run the numbers with your contract and show how HST affects marketability in Georgetown.

Contact: Tony Sousa — tony@sousasells.ca | 416-477-2620 | https://www.sousasells.ca

FAQ — HST and selling new builds in Georgetown, Ontario

Q: Is HST always 13% in Georgetown?
A: Yes. Ontario’s HST rate is 13% (5% federal + 8% provincial).

Q: If I bought new and never lived in the house, do I have to charge HST when I sell?
A: If you’re the original builder or the sale is the first sale of the newly constructed property, HST applies. If you bought the house from a builder as a homeowner and then sell it later as a used home, it’s typically exempt.

Q: Does HST apply to condo assignment sales?
A: Assignment sales often trigger HST. The assignment payment may be taxable. Get a tax opinion before proceeding.

Q: Can the buyer claim the new housing rebate to reduce their HST?
A: Potentially. Rebates are available for qualifying owner-occupiers. Eligibility depends on use, price, and other conditions. The buyer or their tax advisor should confirm with CRA.

Q: How should I list the price — with HST or without?
A: If HST applies, show the base price and state that HST will be added. Transparency prevents surprises and broken offers.

Q: What if I didn’t collect HST but I should have?
A: You may be liable for HST, penalties, and interest. Contact an accountant immediately and disclose the situation to limit consequences.

Q: Who can I talk to locally about this in Georgetown?
A: Talk to a realtor experienced with new builds and HST issues and an HST accountant. For listing help and a tax-aware sales strategy, contact Tony Sousa: tony@sousasells.ca | 416-477-2620.

Q: Where can I get official guidance?
A: The Canada Revenue Agency (CRA) publishes guidance on GST/HST and housing. Use CRA publications and consult a tax pro for decisions.

If you want a line-by-line review of your purchase agreement, closing statement, or assignment contract, email the documents and I’ll highlight where HST can bite you and how to protect your proceeds.