Fw: GST on property purchase (hobby farm) - international non-resident cross border income tax help estate family trust ass

Subject:        GST on property purchase (hobby farm)
Expert:         taxman@centa.com
Date:           Tuesday April 10, 2007
Time:           01:43 PM -0400


We are considering buying a residence that is on 10 Acres and is owned by people who have been growing flowers and selling them to Canadian Tire.  The property is zoned minimum 10 acres.  The flowers are not the primary source of income.  The property has farm status.  The property has a residence which is used full time by the owners of the property.  Will full GST have to be paid on the purchase of this property?
david ingram replies:

I don't know from the information given.

The following older answer may help.

My question is: Canadian-specific

QUESTION: I am buying an acreage in BC. I am told that I have to pay GST on the purchase price. Is this because it has farm status? Can I get the GST back?
david ingram replies;
Farms are tough and depends upon whether it is a working farm and being sold as a working farm or for the personal use of someone.   The decision on whether or not to charge GST is the decision of the vendor, not the purchaser.  If the vendor decides not to charge and the CRA decides that GST should have been charged, the vendor is liable for the tax because it is assumed that the price included the GST.  Therefore, a farmer who was a GST registrant is ALWAYS going to want to charge GST.
There is no general exemption for the sale of farm land

*    A Farm Land Transfer to Family Members Exemption (Farming Exemption)

However, there IS a limited exemption on the sale of farm land if:

  • the property was used by the individual himself and was farmed at any time;
  • immediately before transferring the property the property has been farmed; and
  • the new use of land must be personal to the individual or to the relative of the individual

    A similar exemption also extends to the sale by a corporation, partnership or trust with the same criteria as above.

    This prevents G.S.T. becoming payable on a deemed change of use of farm land to personal use or the conveyance of farm land to a family member.  

    We just went through this with a working farm sold to someone who intended to farm it. GST was payable. 

  • In this case,  to defer the GST, you must register as a farm yourself and then, after paying the tax,  you will get an input credit and a refund when you file your first return.  Recognizing that this can be an immense cash flow problem, the government has come up with form ????  or you can defer the tax by filling in a form ??? .  David Stoller, a lawyer in the same building as us at (604) 922-4702

  • can likely give you the name of the form and since he has just finished such a transaction for the seller is likely as good a lawyer as any to help with yours.
    His office is at:
    801-100 Park Royal South
    West Vancouver, BC
    V7T 1A2

    david ingram wrote:
    David Ingram's US / Canada Services
    US / Canada / Mexico tax, Immigration and working Visa Specialists
    US / Canada Real Estate Specialists
    My Home office is at:
    4466 Prospect Road
    North Vancouver,  BC, CANADA, V7N 3L7
    Cell (604) 657-8451 -
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    Calls welcomed from 10 AM to 9 PM 7 days a week  Vancouver (LA) time -  (please do not fax or phone outside of those hours as this is a home office)
    Disclaimer:  This question has been answered without detailed information or consultation and is to be regarded only as general comment.   Nothing in this message is or should be construed as advice in any particular circumstances. No contract exists between the reader and the author and any and all non-contractual duties are expressly denied. All readers should obtain formal advice from a competent and appropriately qualified legal practitioner or tax specialist for expert help, assistance, preparation, or consultation  in connection with personal or business affairs such as at www.centa.com. If you forward this message, this disclaimer must be included."
    Be ALERT,  the world needs more "lerts"
    David Ingram gives expert income tax & immigration help to non-resident Americans & Canadians from New York to California to Mexico  family, estate, income trust trusts Cross border, dual citizen - out of country investments are all handled with competence & authority.
    Phone consultations are $400 for 15 minutes to 50 minutes (professional hour). Please note that GST is added if product remains in Canada or a phone consultation is in Canada.
    This is not intended to be definitive but in general I am quoting $800 to $2,800 for a dual country tax return.
    $800 would be one T4 slip one W2 slip one or two interest slips and you lived in one country only - no self employment or rentals or capital gains - you did not move into or out of the country in this year.
    $1,000 would be the same with one rental
    $1,200 would be the same with one business no rental
    $1,200 would be the minimum with a move in or out of the country. These are complicated because of the back and forth foreign tax credits. - The IRS says a foreign tax credit takes 1 hour and 53 minutes.
    $1,500 would be the minimum with a rental or two in the country you do not live in or a rental and a business and foreign tax credits  no move in or out

    $1,600 would be for two people with income from two countries

    $2,800 would be all of the above and you moved in and out of the country.
    This is just a guideline for US / Canadian returns
    We will still prepare Canadian only (lives in Canada, no US connection period) with two or three slips and no capital gains, etc. for $150.00 up.
    With a Rental for $350
    A Business for $350 - Rental and business likely $450
    And an American only (lives in the US with no Canadian income or filing period) with about the same things in the same range with a little bit more if there is a state return.
    Moving in or out of the country or part year earnings in the US will ALWAYS be $800 and up.
    TDF 90-22.1 forms are $50 for the first and $25.00 each after that when part of a tax return.
    8891 forms are generally $50.00 to $100.00 each.
    18 RRSPs would be $900.00 - (maybe amalgamate a couple)
    Capital gains *sales)  are likely $50.00 for the first and $20.00 each after that.
    Just a guideline not etched in stone. 
    This from "ask an income trusts tax and immigration expert" from www.centa.com or www.jurock.com or www.featureweb.com. David Ingram deals on a daily basis with expatriate tax returns with multi jurisdictional cross and trans border expatriate problems  for the United States, Canada, Mexico, Great Britain, United Kingdom, Kuwait, Dubai, Saudi Arabia, Thailand, Indonesia, Japan, China, New Zealand, France, Germany, Spain, Italy, Russia, Georgia, Brazil, Peru, Ecuador, Bolivia, Scotland, Ireland, Hawaii, Florida, Montana, Morocco, Israel, Iraq, Iran, India, Pakistan, Afghanistan, Mali, Bangkok, Greenland, Iceland, Cuba, Bahamas, Bermuda, Barbados, St Vincent, Grenada,, Virgin Islands, US, UK, GB, and any of the 43 states with state tax returns, etc. Rockwall, Dallas, San Antonio Houston, Denmark, Finland, Sweden Norway Bulgaria Croatia Income Tax and Immigration Tips, Income Tax  Immigration Wizard Antarctica Rwanda Guru  Consultant Specialist Section 216(4) 216(1) NR6 NR-6 NR 6 Non-Resident Real Estate tax specialist expert preparer expatriate anti money laundering money seasoning FINTRAC E677 E667 105 106 TDF-90 Reporting $10,000 cross border transactions Grand Cayman Aruba Zimbabwe South Africa Namibia help USA US Income Tax Convention

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