Important Disclaimer

Before we get into this, it’s important to say this upfront.

HST on real estate can depend heavily on the specifics of a situation. Things like how a property has been used, whether someone is considered a builder or operating a business, whether the buyer is registered for HST, and how the agreement is written can all change the outcome.

This article is general information based on how these situations typically work. It is not legal or tax advice. If you are buying or selling and HST might be a factor, it’s always worth confirming details with a real estate lawyer or accountant.

---

The Simple Version (That Most People Actually Need)

Most people buying or selling a typical home don’t have to think about HST.

If you’re buying a resale home that someone has been living in, HST usually does not apply.

But the moment you step outside that lane, things can change.

New construction, substantially renovated homes, commercial property, and anything tied to a business can bring HST into the conversation.

Vacant land is a bit different. Most vacant land sales in New Brunswick by individuals are not subject to HST, but there are specific situations where it can apply.

And when HST does come up, it matters.

---

When HST Usually Does NOT Apply

In most everyday residential transactions, HST is not part of the deal.

This typically includes:

• Resale homes that have been lived in
• Properties that have not been substantially renovated
• Sales by individuals who are not operating as builders or businesses

This is why a lot of people go through multiple real estate transactions and never encounter HST at all.

---

When HST Often DOES Apply

This is where people get caught off guard.

HST is more likely to apply in situations like:

• New construction homes
• Homes that have been substantially renovated
• Commercial or mixed-use properties
• Property being sold as part of a business or income-generating activity

If you’re in one of these categories, don’t assume anything. This is where it’s worth asking questions early.

---

Who Pays HST (And Why This Gets Confusing)

Everything in real estate is negotiable.

That said, in many taxable situations, the buyer is the one who ends up paying the HST.

But here’s where it gets important:

Whether HST is included in the purchase price or added on top should always be clearly spelled out in the agreement.

If it’s not, that’s where confusion and disputes can start.

---

Who Sends the HST to CRA?

This is something a lot of people don’t realize:

Who pays the HST and who remits it are not always the same person.

In many cases, the seller collects and remits the HST.

But in some situations, the buyer is responsible for remitting it directly to CRA.

This is one of those areas where assumptions can lead to problems. It needs to be handled correctly at the time of the transaction.

---

New Construction: Assume HST Is Part of the Conversation

If you’re buying a newly built home, HST is almost always part of the deal.

Sometimes it’s included in the advertised price. Sometimes it’s added on top. Often rebates are assigned back to the builder.

There are a few moving parts here, but the key point is simple:

If it’s new construction, HST should always be discussed and clearly understood before you sign anything.

---

Vacant Land: Simpler Than It Seems (Most of the Time)

Vacant land is one of the biggest areas of confusion when it comes to HST.

The short version is this:

Most vacant land sales by individuals in New Brunswick are not subject to HST.

Where it can change is when the land is being sold as part of a business activity.

For example:

• If the land is being sold in the course of a business
• If the seller is considered to be acting as a developer
• If the land has been subdivided in a way that changes how CRA views the activity

One situation that often comes up:

If a parcel of land is subdivided into more than two lots, that can shift how CRA views the seller and may result in HST applying to those sales.

That doesn’t automatically mean HST applies in every case, but it’s a line where things can change.

This is one of those areas where what feels like a simple sale can be viewed very differently from a tax perspective.

The key takeaway:

Most land is not subject to HST, but once you move into development-type activity, the rules can change quickly.

---

Commercial Property and Business Assets

Once a property is tied to a business, things shift again.

Commercial real estate is generally taxable.

And if a property is being sold as part of a business, there may be options available that change how HST is handled entirely.

This is not something to guess your way through. These are situations where good legal and accounting advice is essential.

---

Who Determines if HST Applies?

Buyers and sellers don’t get to choose whether HST applies. That’s determined by tax law.

However, in practice:

The seller is typically responsible for determining whether HST applies to the sale, often with advice from an accountant or lawyer.

If HST is required and is not properly charged or handled, the seller can be held responsible for it after the fact.

For sellers, this should be determined before listing the property, not after an offer is accepted.

---

Why the Agreement Matters More Than You Think

One of the simplest ways to avoid problems is also one of the most overlooked:

Make sure the agreement clearly states how HST is being handled.

Is it included in the price?
Is it in addition to the price?
Who is responsible for remitting it?

These details matter. A lot.

---

Common Misunderstandings I See

A few patterns come up again and again:

• “It’s real estate, so HST must apply.”
  Not true. Most resale homes are exempt.
• “I don’t have to pay HST because I’m an individual buying from a business.”
  Not true. If you buy shoes from a business, you pay tax. Real estate works the same way when it’s a taxable sale.
• “The buyer pays it, so the seller must remit it.”
  Not always.
• “I’m just an individual, so HST doesn’t apply to me.”
  Not always. If the activity looks like a business or development, HST can still apply even if the seller isn’t a corporation.

---

Final Thoughts

If there’s one takeaway here, it’s this:

Don’t assume HST doesn’t apply.
And don’t assume it does.

Most of the time, things are straightforward.

But when they’re not, it’s worth getting clarity before you sign, not after.

A quick conversation with your REALTOR®, lawyer, or accountant can save you from a much bigger issue down the road.

---

I cannot provide tax advice, but if you’re looking for the perspective of a REALTOR®, or looking to work with somebody who understands HST and real estate, reach out anytime!