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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 101408
Experience:  Lawyer
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This is probably an accountant question but I cannot find that

This answer was rated:

This is probably an accountant question but I cannot find that category.
I have property owned under a limited corporation, in Ontario Canada. I rent the cottages so have a HST number.
I need to know if I sell the property to someone who just wants the cottages for their own residences, no business adventure, would they need to pay the 13%HST tax on the sale?
Thank you
Thank you for your question.

Before I begin I want to explain a bit about how the site works.

It may be that I will find that I need to gather further information from you. As well, it's quite possible that you may feel the need to ask me additional questions for further clarification.Please do not worry that you will be charged additionally if I ask you questions or if you need to ask me questions. That is not at all how the site works.

As well, please understand that as a careful lawyer I will always give you an honest answer even if the answer is sometimes not what you were hoping for.

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In your case it is very likely that you will have to pay HST and for this reason you can charge it.

The reason why is that you have to charge HST if you used a vacation property as a rental for at least 50% of the time where the rent was taxable and there was a reasonable expectation of profit.

I do suggest you run your facts in some detail by a chartered accountant, in person, to see if the accountant can help you set this up in the most tax effective way possible.

Let me know if you need any further clarification.
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