Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



GST & Real Property - Seller Beware

The Canada Revenue Agency (CRA) has said on many occassions that the onus is on a vendor of real property to verify that the purchaser is registered for goods and services tax (GST) purposes. The CRA has assessed vendors who have received representations and warranties from purchasers concerning the purchaser’s registration status where the vendor did not verify the correctness of the purchaser’s representation and warranty.

The CRA has also denied input tax credits claimed by persons who paid GST to suppliers where the supplier was not registered for GST purposes. The CRA has further denied input tax credits where the records of the person claiming the input tax credit does not contain the supplier’s GST number.

To avoid difficulties:

1.                  Always get the GST numbers of parties to a transaction;

2.                  Call the CRAto verify the correctness of GST numbers given.

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