Is the sale of vacant land subject to HST?
By Shari Elliott
The answer is probably not … but, maybe.
The situations when the sale will be tax exempt include: if the vendor is an individual and the land was kept by that person for personal use; if the parcel is being created by subdividing another parcel and the vendor is an individual and the land is being sold to a relative (including a former spouse or common-law partner) for their personal use; and finally, if you have never previously subdivided or severed your parcel of vacant land from another that you owned, and you subdivide the parcel into only two parts the sale of either of those parts is exempt.
In contrast, situations when the sale will be subject to HST include: if the sale of the land is capital property that had been used primarily in a business, or the sale of the land is in the course of business and if the land was subdivided into more than two parts, sales of the severed portions are taxable, unless sold to a relative for personal use. Read Elliott & Elliott Blog