Do You Pay GST on Resale Homes in Alberta? Rare Exceptions

If you are buying a previously lived-in house or condo in Alberta, you probably do not need to add GST to your budget. For most ordinary resales, the answer is no.

There are a few unusual situations where GST can come up, and they are worth knowing about before you sign. This article explains the general rule and those exceptions in plain terms.

This article covers the law of Alberta.

The general rule for resale homes

Under Schedule V, Part I, section 2 of the Excise Tax Act, the sale of a residential complex is exempt from GST when it is made by a person who is not a builder of the complex. That covers the typical homeowner selling a house or condo they have lived in.

Alberta also has no provincial sales tax, so no PST is charged on a home purchase. Instead, buyers pay Land Titles registration charges based on the value of the land.

Rare cases where GST can apply

The resale exemption has exceptions. They turn on the seller's history with the property and, in one case, on the buyer's status as well:

• The seller claimed an input tax credit on the last acquisition of the property, for example a unit used in a business.
• A GST-registered buyer bought from a prior taxable seller within one year, no individual has lived in the home since construction or the last substantial renovation, the sale follows a right to purchase in the earlier agreement, and an election is filed.
• For a resale condo, the seller used the unit mainly (over 50%) for business, claimed input tax credits for improvements, or the unit was substantially renovated.

These situations are uncommon for a typical family buying a lived-in home, but they can come up with investor-owned units or flipped properties.

Renovated and rebuilt homes

A substantial renovation generally means 90% or more of the existing house's interior was removed or replaced. Foundation, exterior and supporting walls, roof, floors and staircases need not be replaced, and garages and crawl spaces do not count.

When construction or a substantial renovation is substantially completed and a builder first gives possession or occupancy, the builder is deemed to have sold the home, and tax is calculated on its fair market value. This does not apply to an individual builder who uses the home primarily as a residence for themself, a related individual or a former spouse or common-law partner, and has not claimed an input tax credit. Because of this, a freshly renovated home sold by a builder may be treated like a new home, so ask who the seller is and what work was done.

Other closing costs that still apply on a resale

Even when no GST applies, a resale purchase has other costs to plan for. Alberta charges no land transfer tax, but the buyer named in a transfer pays a Land Titles levy of $50 plus $5 for each $5000 or portion thereof of the value of the land. Any part of a $5,000 step is charged as a full step, so a $400,000 value gives $50 + 80 × $5 = $450.

The $5 per $5,000 rate applies to submissions received by the Land Titles Office on or after October 20, 2024. Before that date the transfer rate was $2 per $5,000, so older articles may show lower figures.

• Mortgage levy: if you register a mortgage, the mortgagor pays $50 plus $5 for each $5000 or portion thereof of the principal secured. It is charged only when a mortgage is registered, so a buyer paying cash with no mortgage does not pay it, and it is based on the amount secured, not the purchase price.
• Refund: if the Registrar does not accept the transfer instrument, the transfer levy is returned to the transferee.
• Property tax: unpaid property tax is a special lien on the land, which is why it is dealt with at closing. On request, the municipality issues a tax certificate showing taxes imposed, taxes owing, arrears and any deferred taxes, and lawyers use it for the tax adjustment.
• Title insurance: the standard Alberta residential purchase contract does not require it, and it does not take the place of a Real Property Report.

Registration fees are listed in the Tariff of Fees Regulation (AR 120/2000) and must be paid when the document is submitted. Fees can change, so confirm the current amounts with your lawyer before closing.

What to do next

• Ask the seller whether they lived in the home and whether it was ever used for business or rented out.
• Ask whether the seller claimed GST input tax credits on the purchase or on improvements.
• Find out whether the home or unit was substantially renovated, and by whom.
• Check the purchase contract for any wording about GST.
• Have a lawyer or accountant confirm the GST position if the seller is a builder, investor or business.

If the seller is an ordinary homeowner and the home was never used for business, GST is generally not an issue.

Frequently asked questions