Do I pay 5% sales tax or 12% sales tax on my real estate commission?

Do I pay 5% sales tax or 12% sales tax on my real estate commission?

This is a very good question for purchasers of real estate in British Columbia.

On August 26, 2011, the British Columbia government announced the results of the referendum held to determine whether the 12% HST should be kept or whether BC should move back to the 5% GST and 7% BC PST. The voters decided to scrap the 12% HST.

The BC and federal governments need to determine the conversion date that the HST will be cancelled and the GST / PST will be re-introduced. In addition, transitional rules have not yet been announced. Transitional rules deal with issues such as how to tax transactions that were partly before the conversion date and partly after the conversion date. We also don't know whether the BC government plans to apply the BC PST to real estate commissions.

Thus, at the present time, without knowing key information, it is not possible to clearly state the amount of sales tax that you will owe on your real estate commission in British Columbia. It will also depend on when your real estate transaction occurs.

This article is intended to inform readers of developments as of the date of publication on August 27, 2011 and is neither a definitive analysis of the law, proposed law, administrative positions, interpretations, court cases etc. nor a substitute for professional advice. Readers should discuss with appropriate professional tax advisors, financial advisors, legal counsel and/or other advisors regarding how the information may apply to their specific situations. This post will NOT be updated for changes in legislation, court cases, interpretations or other matters after publication. E.&O.E.

Do I pay 5% sales tax or 12% sales tax on my real estate commission?