Why are some properties taxable (GST and TVQ)?

Property tax concept with model of houses with tax sign on wooden table

This must be the question most frequently asked of Mont-Tremblant real estate agents! As you undoubtedly know, all new properties are taxable. What remains less well known, however, is that the government allows the taxes not to be paid on purchase if the purchaser intends to use the property commercially.

In our real estate jargon, the term is “deferring the taxes”.

Commercial use is actually short-term rental, for 90 per cent of the year. The property must thus be rented or available for rental 90 per cent of the time, which allows the owner 10 per cent personal use.

To do this, when the sales contact has been signed, the purchaser must already have registered to provide the notary with their GST and TVQ numbers.

The government allows this practice because short-term rental is taxable and the purchaser will be getting revenues from each rental. Whether it’s through a rental agency, Airbnb, Booking or whatever, it’s all the same to the government.

When the property is resold, the taxes will come due. This explains why, in Mont-Tremblant, a number of properties on the market are taxable even though they’re not new. The new purchaser will have the choice of paying the GST and TVQ or, similarly, of using the property commercially … and so on ad infinitum.

Be careful, though, because short-term rental is not legal in all sectors of Mont-Tremblant, and just because the property is taxable doesn’t mean that the zoning permits this kind of rental.

So…do you buy a taxable or non-taxable property? It depends.

It is important that this be discussed with your real estate agent-ally so that they can advise you.

 

Pascale Janson17 Posts

Pascale Janson, BAA Directrice d’agence, copropriétaire et courtier immobilier agréé chez Les Versants Mont-Tremblant. Pascale détient un baccalauréat en marketing et en gestion d’entreprise des HEC de Montréal. Elle a travaillé plusieurs années à Paris et à Montréal. En 2003, elle a décidé de relever le défi de créer, avec son père, sa propre bannière en immobilier. / Agency manager and co-owner Pascale studied marketing and management at the HEC Montréal and worked for several years in Paris and Montreal. In 2003, she agreed to her father Etienne’s proposal to open a local real estate office.

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