Is HST Going to Cost You 13% When You Sell Your Milton Home? Here’s Exactly How It Works

How does HST apply to home sales?

“Is HST going to cost you 13% when you sell your Milton home? Read this first.”

Quick answer up front

HST generally does NOT apply to resale homes in Milton, Ontario. But there are important exceptions: HST applies to new homes sold by builders, substantially renovated homes, assignment sales, and some land or commercial/residential conversions. Realtor commission, legal fees related to the sale, and certain closing adjustments often attract HST. Know where your sale fits and you won’t get surprised at closing.

Why this matters to Milton sellers

If you’re selling a house in Milton, ON (13% HST rate), a mistake about HST can cost you thousands or delay your closing. Buyers and lawyers expect clarity on whether the price is HST-inclusive or HST-extra. As your local real estate advisor, I steer sellers to the exact paperwork language, coordinate with accountants and lawyers, and keep deals clean so closings happen on time.

The basic rule: resale vs. new

• Resale (used) homes: Generally exempt from HST. If you’ve lived in the house and are selling a typical used property, you and the buyer usually won’t pay HST on the purchase price.
• New homes: HST applies when a builder sells a newly constructed home or a home sold by a person who built it as a business.
• Substantially renovated homes: If the renovation essentially made the home “new” (the CRA treats it as a new housing supply), HST can apply. This is a technical test — get a tax professional involved.

Common scenarios Milton sellers face

• Owner-occupied resale: No HST. Typical single-family home, townhouse or condo sold by a homeowner — exempt.
• New build sold by a builder/developer: HST applies at 13%. Builders normally include it in the sale price or show it separately. Buyers may qualify for a new housing rebate — but that’s for buyers, not sellers.
• Assignment of purchase agreement (condo assignments): Often taxable because assignments transfer a contract for a new home. Assignor and assignee must know the HST exposure and account for it in the assignment price.
• Substantial renovation: If you renovated to the studs and the CRA considers the property effectively new, the sale can be taxable.
• Sale of land or development parcels: HST may apply depending on how the land is used and whether it’s considered inventory for a business.

What sellers in Milton must include in the Agreement of Purchase and Sale (APS)

Be precise in the APS. The single fastest cause of HST disputes is unclear wording.

• State whether the price is HST-inclusive or HST-extra.
• If HST applies, specify who pays it — vendor or purchaser — and how it will be calculated and remitted.
• Address deposit treatment: if deposit funds need to be held in trust pending HST determination, say so.
• Include a representation clause about whether the vendor is the builder, has recently completed a substantial renovation, or is assigning a contract.

Sample clause language (use with your lawyer):
“Purchase price is [inclusive/exclusive] of HST. If HST is payable on the sale, the party responsible for HST shall pay the additional amount to be remitted per CRA rules; any adjustments at closing will be made on the statement of adjustments.”

Real-life Milton tips that save money and time

1. Ask the three HST questions before listing: Is this a resale? Is it a new home built by a builder? Is it an assignment or substantially renovated? Answering these avoids surprises.
2. Get your lawyer and accountant looped in early. Lawyers prepare closing statements and accountants advise on rebate eligibility and tax reporting.
3. Document renovations. If you recently renovated, keep invoices, permits and contractor contracts. These documents are critical if HST status is questioned.
4. Check the builder’s paperwork for new homes and assignments. Builders may price HST differently — sometimes rolling it into the purchase price, sometimes showing it separately.
5. Expect REALTOR® commission to have HST. The commission is taxable; your net proceeds should account for HST on the commission.

How HST shows up at closing in Milton

• If HST applies to the sale price, the buyer usually pays it. The result: purchase price + 13% HST.
• Lawyers prepare the statement of adjustments. They will list HST where applicable and show how deposits were applied.
• If the sale triggers rebates (buyer-focused), the buyer or their lawyer usually applies to CRA after closing. Sellers are rarely the recipients of new housing rebates unless they are the builder.

What about flips and investor sales in Milton?

If you flip houses as a business or habit, CRA can treat your activity as commercial. Sales of inventory by a business are taxable. If you frequently buy-renovate-sell, plan for HST, and keep clean accounting. Speak to a Milton tax accountant to register and manage HST collections and remittances.

Realtor commission and legal fees — what sellers should expect

• Commission: HST applies on commission charged by your Realtor. For Ontario that’s 13% HST on top of the commission fee unless the commission amount is stated as HST-inclusive.
• Legal fees: Legal services often attract HST. Expect your legal invoice to include HST for services rendered when closing.
  Include these in your net proceeds planning so the numbers add up.

Local regulations and resources for Milton sellers

• Ontario HST rate: 13% (5% federal GST + 8% provincial portion).
• CRA is the final authority on HST rules. For borderline cases like substantial renovation or assignment sales, CRA guidance and private rulings can determine taxability.
• Use a Milton real estate lawyer experienced with HST issues. They’ll draft APS clauses, manage adjustments, and liaise with accountants.

If you want referrals to trusted Milton lawyers and accountants I’ve used on dozens of local closings, contact me. I vet the professionals based on results and responsiveness.

How I help Milton sellers avoid HST traps (practical, direct)

• I identify the HST risk at listing — new build? substantial renovation? assignment? investor inventory?
• I recommend precise APS clauses and review them with your lawyer.
• I coordinate with your accountant so you understand if HST registration, collection or rebate rules affect you.
• I manage buyer communications so they know whether price is HST-inclusive or extra.

These steps cut closing delays and reduce the chance of unexpected HST bills.

When to call a tax lawyer or accountant (and why you must)

• If the home was substantially renovated within a few years.
• If the seller is a builder, developer, or frequent flipper.
• For assignment sales of pre-construction condos.
• If you’re unclear whether a sale includes taxable land or inventory.

These are technical areas where a local Milton tax lawyer or accountant saves you money and risk.

FAQ — HST, Legal Paperwork, and Home Sales in Milton, ON

Q: Does a typical Milton homeowner pay HST when selling a house?
A: No. Most resale homes are exempt from HST. HST usually applies to new homes sold by builders or to substantially renovated properties.

Q: Do I charge HST on my Realtor commission?
A: Yes. Realtor commissions are subject to HST at 13% in Ontario.

Q: I recently did a major renovation. Will HST apply when I sell?
A: Possibly. If the renovation is ‘substantial’ and the property is considered effectively new by CRA, HST can apply. Gather invoices and consult a tax professional.

Q: What about assignments for pre-construction condos in Milton?
A: Assignments often attract HST because they transfer a contract for a new home. Both the assignor and assignee need clarity on the tax treatment ahead of closing.

Q: Can a buyer claim a new housing rebate?
A: Buyers of new homes may qualify for federal or provincial new housing rebates. These rebates reduce the HST burden for eligible buyers — not typically the seller’s problem but worth discussing during negotiations.

Q: How should HST be shown in the Agreement of Purchase and Sale?
A: State clearly whether the price is HST-inclusive or HST-extra. Specify who pays HST and how adjustments at closing will be handled. Ask your lawyer to draft the exact language.

Q: Who handles HST at closing — realtor, lawyer or CRA?
A: Lawyers prepare the statement of adjustments and handle remittances where applicable. CRA enforces tax rules and processes rebates.

Q: I flip houses part-time. Do I need to register for HST?
A: If your activities amount to a business (regular purchase-renovate-sell), CRA may consider your sales taxable. Consult an accountant to determine registration obligations.

Q: Where can I get help in Milton?
A: Contact a Milton real estate lawyer experienced in HST issues and a tax accountant. If you want referrals or a review of your listing paperwork, email tony@sousasells.ca or call 416-477-2620.

If you’re selling in Milton and want to remove HST guesswork from your deal, get a quick, accurate assessment before you list. I’ll pull your specifics, coordinate legal and tax advice, and write the paperwork that closes. Contact me at tony@sousasells.ca or 416-477-2620. Let’s make your closing predictable and profitable.