GST and Property Transfer Tax on a New Home in British Columbia

Buying new is different from buying resale when it comes to tax. A new home or presale condo can involve GST and British Columbia property transfer tax, and the rules change if you sell your contract before completion.

This article covers the points that most often affect new-home buyers and assignors. Your exact numbers depend on the price, how you will use the home and your own circumstances, so confirm them with a lawyer or accountant.

This article covers the law of British Columbia.

GST on a new home and on assignments

How GST applies to a new home, and whether the price already includes it, depends on the details of your purchase and your situation. Check your purchase agreement to see how GST is handled, and ask your lawyer or accountant to confirm what applies to you.

One point is clear when you sell your rights before completion. If the property is a new build, the total received on an assignment, including any deposit, is subject to GST/HST. Profit from an assignment sale is treated by the CRA as business income, reported in the year the rights were assigned.

Property transfer tax on a presale unit

Property transfer tax, or PTT, is a British Columbia tax on property transfers, and how it is worked out for a presale unit depends on the facts. For a pre-sold strata unit, it is calculated on the total amount paid, including upgrades and any premium paid for assigning the agreement, if the assignment is made at arm's length before the strata plan is deposited; after deposit, fair market value rules apply instead.

Related parties get different treatment. Assignments to affiliated or newly formed corporations or the purchaser's own corporation are often non-arm's length, and family members are generally presumed not to be at arm's length, so PTT is then based on the amount that would have been paid at arm's length on the open market.

Whether any PTT exemption, reduction or additional tax applies to you depends on your citizenship, residency and the property, so confirm before you close. One exception to know: if a foreign national or foreign corporation signs the original contract and assigns it to a Canadian citizen or permanent resident before registration, the additional property transfer tax does not apply, though penalties can apply if the assignment was made to avoid tax.

If you are assigning your presale contract

Where a presale agreement permits assignment, it must contain a term prohibiting any assignment without the developer's prior consent. The developer must not consent until it has collected the prescribed information and records from each party, and must report it to the Condo and Strata Assignment Integrity Register (CSAIR). Even where consent is not required, the developer must make reasonable efforts to collect the information needed to report the assignment.

For an assignor, the developer must consent, the final purchaser pays PTT on the total amount paid including upgrades, and any profit must be reported on the assignor's income tax return.

The BC home flipping tax

The Residential Property (Short-Term Holding) Profit Tax Act took effect January 1, 2025. The tax is 20% of net taxable income on property disposed of within 365 days, decreasing over the next 365 days and ending at 730 days. Assigning a presale contract can be taxable, and the primary residence deduction is not available on assignment.

For presale contracts, the holding period starts on the date you pay for the contract, usually the deposit, and ends when you receive money from the assignee. A return is due within 90 days of the sale if the contract was disposed of within 729 days and no exemption applies. The developer making the initial presale agreement with the first purchaser need not file.

Exceptions exist. A presale assignment may be exempt where the estimated completion date on the contract is delayed by more than 365 days, but presale contracts do not qualify for the builder or developer, renovation or exclusive commercial use exemptions. Other exemptions include life circumstances and dispositions between related persons, both requiring a filing.

What to do next

• Find the GST wording in your purchase agreement and ask whether the price includes it
• Ask your accountant how GST and income tax apply to your purchase or assignment
• Confirm your PTT position before closing, especially if you are a foreign national or buying through a corporation
• If you plan to assign, get the developer's consent process and your tax position reviewed first
• Note your deposit date, since it may start the flipping tax clock
• Keep every receipt for upgrades, since they affect the amount paid

Frequently asked questions