Tax

What Is GST and HST?

Federal consumption taxes on most goods and services. GST is 5%; HST combines federal and provincial sales tax in certain provinces for a combined rate of 13% to 15%.

Definition

The Goods and Services Tax (GST) is a 5% federal tax levied on the supply of most goods and services in Canada. Several provinces have combined their provincial sales tax with the federal GST into the Harmonized Sales Tax (HST): Ontario (13%), New Brunswick, Nova Scotia, Newfoundland (15%), and Prince Edward Island (15%). BC, Alberta, Saskatchewan, Manitoba, and Quebec apply the 5% GST separately from their provincial sales tax. In real estate, new home purchases are subject to GST or HST, though a New Housing Rebate can partially offset the tax for homes under $450,000. Resale homes are generally exempt. Businesses with over $30,000 in annual revenue must register for GST or HST and remit it to the Canada Revenue Agency (CRA).

Formula

GST: 5% x price. HST (Ontario example): 13% x price

Example

You buy a new construction condo in Ontario for $500,000. HST = 13% x $500,000 = $65,000 before rebates. The federal new housing rebate and Ontario provincial rebate can reduce this significantly for owner-occupied homes.

Use It

Try the Land Transfer Tax Calculator

Related Terms

Land Transfer Tax (LTT)A provincial tax paid by the buyer when a property changes hands. Rates and rules vary significantly by province. Ontario and BC have the highest rates.Closing Costs in CanadaThe additional expenses beyond the purchase price paid at closing, typically 1.5% to 4% of the home price. Includes land transfer tax, legal fees, title insurance, and home inspection.
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