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Debra
Debra, Lawyer
Category: Canada Law
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I am purchasing vacant land from an individual who says that

Customer Question

I am purchasing vacant land from an individual who says that they are required to charge GST but only stipulates that it is subject to GST payable and wont state what is making the transaction subject to GST just that it is.
The Seller is an individual and said he bought the property on speculation.
The contract states that the Buyer was to obtain ila with respect to GST but I cannot because whether a transaction is subject to GST or not is determined by the Seller's use of the Property.
Is the Seller required to tell me the reason why this transaction is subject to GST and if he won't what can I do. I have no problem paying the GST if it is applicable but I dont feel that I should pay GST if it is not applicable. I cannot ask Revenue Canada to determine whether it is taxable or not because they don't have all the information.
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.

You can tell the seller that you are not prepared to purchase the land until you have proof that GST must be paid. If he agrees to show you the document the lawyer provides that should be good enough. Otherwise, he has to explain to you what he has been doing with land. The reason why is that essentially, the sale of land by an individual that has kept the land for personal use would be exempt from GST.

Here are examples of when GST might have to be paid:

  1. the sale of land that is capital property that had been used primarily in a business;
  2. the sale of land in the course of a business; I told you to stop it before and you this will have to you will be very happy already played and we broke last time you
  3. the sale of a parcel of land created by subdividing another parcel into more than two parts.
Customer: replied 1 year ago.
My Vendor's Lawyer has told my lawyer that I am not privy to the seller's personal information and that we are not able to make a determination regarding GST without the Seller's personal information. That it is not appropriate for the Buyer to ask the Vendor to discuss his business ventures with the Buyer or the Buyer's lawyer. The Seller has been advised by his accountant that this transaction is subject to GST. Do I have the legal right to ask why their accountant says that this transaction is subject to GST or do I just have to assume that the seller's accountant is right which is not always the case.
Expert:  Debra replied 1 year ago.

You can ask but there's no way that you can demand this because you don't have any authority to do so. It wouldn't make sense to sue to get in order as it would cost more and this would be worth to you.

Customer: replied 1 year ago.
of course. I wouldn't be asking the question if there was no contract signed. Contract signed, property disclosure says that the property was previously a grow-up but no details as to the extent of involvement in grow up.
Expert:  Debra replied 1 year ago.

This reply is for your other post.

Please find it and reply there as I cannot deal with a new question on this post.

As well, please rate the answers to this post now. It's not fair to expect me to keep answering a new post when I've not been paid for this one yet.

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