GST reduction

A reduction in the GST from 6 per cent to 5 per cent was announced by the federal government on October 30, 2007. With regard to the purchase price of residential properties, GST only applies to sales of newly constructed and substantially renovated homes. GST is not applied to the purchase price of resale homes, but it does apply to REALTOR® commissions. The reduced rate will become effective on January 1, 2008; however, the reduced rate will apply to the purchase price of new homes immediately, subject to transitional rules detailed below (Note: This summary has been reviewed by the Canadian Real Estate Association for accuracy).