Ontario Real Estate Licensing Exam Practice · Question
A small business based in Windsor sells its vacant commercial land to another business. The land has been held for investment purposes and has never had any structures on it. The seller is an HST registrant. What is the most accurate statement regarding HST on this transaction?
Generally, the sale of commercial real property (including vacant commercial land) by an HST registrant in the course of their commercial activities is subject
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Question: A small business based in Windsor sells its vacant commercial land to another business. The land has been held for investment purposes and has never had any structures on it. The seller is an HST registrant. What is the most accurate statement regarding HST on this transaction?
Answer options:
- The sale of vacant land is always exempt from HST. ✅ HST is applicable, as the seller is an HST registrant selling commercial property.
- HST is only applicable if the land was used in a commercial activity by the seller.
- The buyer and seller can elect not to charge HST if both are HST registrants.
Correct answer: HST is applicable, as the seller is an HST registrant selling commercial property.
Explanation: Generally, the sale of commercial real property (including vacant commercial land) by an HST registrant in the course of their commercial activities is subject to HST. The fact that the land is vacant does not automatically exempt it if the seller is a registrant.
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