QUESTION: My husband and I are planning to build a house here in alberta,
the house will be built by a Builder. The will cost us over 600,000.00
dollars. After it is built we will sell it. Since it is a new home do we get
to claim the GST. I was thinking if we open up a company for buying selling
new homes,can we get the GST back or not?
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david ingram replies:
The sale you are contemplating is NOT a capital gain.
What you are describing is a venture in the nature of trade where you are in
the business of building and selling houses even if you have only done or
are contemplating one house.
Since your gross sale will be over $30,000, it is mandatory that you be
registered as a business and that you collect GST from whomever you sell the
house to. The GST you collect is payable to the CRA. HOWEVER, you will get
to deduct the GST you have paid the builder to build it.
You do not have to be a limited company to do so. You and your husband will
be a partnership and file a partnership T2124 form with your tax returns for
the year that you sell.
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