Canada: GST election for builders, deadline approaching

Canada: GST election for builders, deadline approaching

New housing builders have a short time to decide whether they need to make a new election to correct reporting errors on HST-grandparented housing sales. Builders that want to make the election must file the new election in a reporting period that ends on or after 1 May 2016 and before 1 January 2017.

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For example, a builder with a 31 May year-end and an annual GST/HST* reporting period must file the completed election form by 31 August 2016.

Most builders have monthly GST/HST reporting periods. If such a builder wants to make the election for its September monthly reporting period, the builder must file the completed election no later than 31 October 2016.

Special rules apply for builders who do not have a reporting period ending on or after 1 May 2016 and before 1 January 2017. When a builder has no reporting period that ends during that period, the builder must file the election form in the first reporting period that ends after 31 December 2016.

Builders in provinces that either increased their HST rate or introduced the HST since 2010 (i.e., Ontario, British Columbia, Nova Scotia and Prince Edward Island) need to determine whether they have correctly fulfilled their GST/HST reporting requirements related to their sales of homes that were “grandparented” for purposes of these HST changes. Penalties for incorrectly reporting these sales can be costly. 

 

*GST / HST = goods and services tax / harmonized sales tax

 

Read an August 2016 report [PDF 72 KB] prepared by the KPMG member firm in Canada: Builders—Don’t Miss Deadline for New GST Election

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