Stamp Duty

Posted By: flip flop

Stamp Duty - 10/08/09 04:28 PM

How can I find out if the seller (in this case the builder) paid the stamp tax on my condo? Is there an office I need to go to? Or someone I can call?
Posted By: Amanda Syme

Re: Stamp Duty - 10/08/09 05:02 PM

Are you sure you are referring to stamp tax? Not GST?
Posted By: flip flop

Re: Stamp Duty - 10/08/09 06:41 PM

I'm referring to the 5% tax due when a condo is sold.
Posted By: Diane Campbell

Re: Stamp Duty - 10/08/09 07:15 PM

5% is the Stamp Duty (also referred to as a transfer tax).
Typically the buyer pays this fee, and you should be able to ask your closing agent for a statement of funds distributions, including a receipt for this having been paid.
If you have been given the title to the condo then for sure it was paid, as you can't transfer a title without it.

Posted By: flip flop

Re: Stamp Duty - 10/09/09 04:35 PM

So, does the developer have to pay the GST and stamp tax?
Posted By: Amanda Syme

Re: Stamp Duty - 10/09/09 05:41 PM

Okay, there is no such thing as stamp tax.

The terms are stamp duty and General Sales tax.

The Developer will have paid the General Sales Tax which was included in the sales price when you bought your condo. Each time you made an installment payment a portion would have been for the purchase and a portion of the payment would be the GST that is billed/collected by the Developer and then paid to the Government.

The stamp duty regarding the transfer of land titles, stock share certificates, time shares etc are billed at the time of transfer and recording. Typically this is charged to and paid by the Buyer. This amount is 5% of the purchase price, minus a credit of US$500.00

So if you bought a condo for $110,000 you would have paid $100K for the condo and have paid $10K GST. The developer would be paid $100K and he would have collected $10 gst from you and paid this amount to the GST office.

When you have paid for the condo in full and sign the transfer documents you will submit the transfer amount as $100K and pay 5% tax of $5,000.00 and you would have a credit of $500 so you would submit stamp duty in the amount of $4,500.00

There is still some debate going on as to whether the stamp duty is billed on the $100K purchase price or the full $110K purchase price which included the gst because resale condo sales stamp duties are charged on the full purchase price.

If your developer has paid the gst he can show you tax returns proving that he has done so. However be aware that the developer typically cannot transfer title to you unless his corporate filings are up to date and there are no judgements or assessments lodged against the developer & or his company, the tax department tends to have a number of audits each year so most folks are kept on their toes.
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