Payment of balance

[ErnestBidder]

 You've already paid the downstroke, so you pay the balance of the tender, any accumulated taxes (since the date of advertisement, I think) plus land transfer tax plus registration fee. The accumulated taxes will amount to a few pennies up to some dollars, depending on the value of the property & location.

[Frank]

My understanding is that you can only avoid the GST- now read HST on property transactions, if there is an existing residential unit on the property, or if it is a 'personal use property'...unfortunately the latter would require certification from the former owner, and Revenue Canada deems that in a forteiture the property is coming from the Municipality (I have this in writing), so that won't be available.   All other properties (vacant land, commercial, industrial) is subject to HST, unless you vest it in the name of a Corporation that can purchase property with a exemption. 

Silver lining in all of this is that if you purchase vacant land, and then build a house on it you will be able to include this cost in your total for the GST rebate (only available if your total cost is less than $450,000), and similarly it becomes part of your total cost bundle if you build for the recapture of 6% of the former PST (up to $24,000 available...up to $400,000 in total cost, nothing after that - they presume you can afford it).

[netpred]

Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land  . As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.

[Frank]

Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land  . As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.

I can confirm your assertion, and I have experienced it both ways (on vacant land), some municipalities are unaware that they are required (by Revenue Canada) to charge GST (now HST), and they don't do it.  They will suffer the slings and arrows if they ever have a visit from a Receiver General auditor.  I found out that it is in fact a requirement when I contested a prior sale in which a municipality was charging me. 

Generally, for example, if you sell a cottage lot...let's say an acre, on which you planned to some day build a family cottage, and you camped on it twice each summer, and did some fishing, and put in a tool shed (otherwise known as a hard-tent), then you could declare this property to be a PUP (personal use property), and you could get away with not charging GST. 

This was in fact the type of property I was purchasing through a tax sale,  however the Municipality refused to accept that it was PUP by the delinquent tax-payer.  Rev. Can. confirmed that in their view, even though the Municipality never became the formal owner, I was getting the property from them by way of a deed they were issuing (a forteiture sale, it is the same for forclosures), and therefore the Municipality was 'deemed' to be the owner and couldn't declare a PUP.

[netpred]

Thanks for the information Frank. The source of your information, as well as your logic and reasoning, appears to be flawless. It is always a good day when I learn something new.

So bidders, to be on the safe side you should factor in another 13% on your bids to cover any HST.

[Dave2]

Frank, what you say may be correct but I can tell you for a fact that at least some municipalities are not charging HST on vacant land  . As an aside, I believe that the municipality is responsible for registration of the tax deed so the purchaser does not have to pay the registration fee.

 Generally, for example, if you sell a cottage lot...let's say an acre, on which you planned to some day build a family cottage, and you camped on it twice each summer, and did some fishing, and put in a tool shed (otherwise known as a hard-tent), then you could declare this property to be a PUP (personal use property), and you could get away with not charging GST.  

A couple of exceptions.   1)  if you have the fortune to buy a big piece of property the personal use is limited to I think it is about 1 hectare around the residence.   You will pay HST on the remainder.  

2)  If you hare really successful like Frank you are deemed to be in the business of buying and selling land and have to charge HST. There is some debate if about how many properties you are allowed to sell before you are deemed to be in the land selling business.    Some people say 2 and some 3.

Of course you can write off imput taxes.