Tool Box
HST on Toronto Real Estate Commissions

 Get the goods on HST and how it affects what you pay on real estate commissions.


Generally, HST will be payable on commissions for any
Toronto real estate sale closed after July 1, 2010.  However,
the general transitional rule (for sale contracts entered into
before July 1, 2010), is if at least 90% of the services
were performed prior to July 1, 2010, only 5% G_S_T is
payable (no PST).  If an offer to purchase real estate was
accepted prior to July 1, 2010, then the realtor services
were performed prior to July 1, 2010, and only 5% GST
should be payable even though the realtor’s commission
is not due for payment until the sale has closed after July
1, 2010. Warning to sellers: If, prior to July 1, 2010, a
seller is about to accept an offer to purchase (which will
close after July 1, 2010), the seller should clarify
in writing with the realtor that only G_S_T will be payable
on commissions due on a sale closing after July 1, 2010.