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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
IX. WRITS OF EXECUTION An execution search is automatically conducted against the vendor by the electronic registration system prior to the registration of a transfer. In a lawsuit, the successful party is awarded a judgement in its favour against the other party. The successful party can then obtain a writ to be filed against the unsuccessful party in any district in which the other party owns property pursuant to the Execution Act. The writ of execution allows for the seizure and sale of real property, amongst other rights. Buyers should not close the purchase of lands if the registered owner is subject to a writ of execution, as the property will be noted as being subject to the writ of execution. X. THE ONTARIO NEW HOME WARRANTIES PLAN (ONHW) ACT Defects in newly built homes are subject to the Ontario New Home Warranties Plan Act. The Act was implemented to protect new home buyers from defective and faulty construction by the builder. All builders and all new homes have to be registered under the Act . Tarion, a crown corporation, is responsible for implementing the Act and indemnifying new buyers in case of loss.
XI. HST The Harmonized Sales Tax (" HST ") is a 13% tax on the sale of all goods and services across Ontario, with certain exemptions. HST does not apply to used housing (i.e., any residential home where the buyer is not purchasing a new build.) However, HST is payable for the purchase of new homes and substantially renovated homes, where 90% or more of the interior has been renovated and was inhabited for less than one year. Since May 7, 2022, HST is also applicable to all assignments of agreements of purchase and sale for new houses and condominium units and is chargeable by the assignor and payable by an assignee on the portion of the assignment purchase price representing the assignor's profit, over and above what the assignor agreed to pay the vendor, but excluding the reimbursement of deposits by the assignee to the assignor. HST applies to most commercial transactions, subject to some exceptions. The purchase agreement stipulates whether HST is included in the purchase price or not. If the buyer is an HST registrant, the buyer may self-assess, claim input tax credits and remit any HST owing to the Canada Revenue Agency (" CRA ") directly. The seller will require an indemnity from the buyer on closing to protect the seller from the buyer's failure to remit the tax. The seller should confirm the buyer's HST registration number with CRA prior to closing. XII. RESIDENCY STATUS OF THE SELLER Residential property that is designated as a primary residence of seller who is not a non-resident of Canada is usually exempt from income taxes with CRA. Section 116 of the Income Tax Act imposes liability on both the seller and buyer during the property transaction. The seller is
ILN Real Estate Group – Buying and Selling Real Estate Series
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