When putting your farm up for sale, it is essential to make sure that the terms of real estate sale agreement are “excluding HST”!
Beware of Offers ‘Inclusive of HST’
Depending on the registration of the party you are selling your farm to, you don’t want to accept an offer inclusive of HST.
You Could Get Stuck Paying HST
Accepting an offer inclusive of HST could mean that you are responsible for remitting 13% of the proceeds of your farm land sale to the government.
Buyer May Not Be HST Registered
If the other party, for whatever reason, were not to be an HST registrant this could leave you on the hook for a tax bill.
Exclusive of HST
Accepting an offer on your property “exclusive of HST” ensures that whatever the tax outcome, you have agreed to a price for the property itself, and the taxes will be dealt with separately.