February 26, 2026

Short Term Rentals: Part 2 GST/HST Implications of Buying and Selling

Written by Cameron Kerr B.A, CPA
An image of a short term rental property in Ottawa region that the owner is selling

When buying or selling a vacation property it is important to consider if that property will be subject to GST/HST. In the last article of this series, we discussed what a short-term rental property is and the requirements for registering for GST/HST. This post will focus on the tax implications of buying or selling a short-term rental property.

Purchase or Sale of a Vacation Property

When purchasing or selling a vacation property it is important to understand if GST/HST may apply. Important questions to ask include:

  • Was the property used as a short-term rental property?
  • Was the property a mixed-use property where the owner may have rented for a season and used for personal use at other times?

If the property was used for short-term rental purposes, the sale of the property may be subject to GST/HST, which means the seller may need to collect and remit the GST/HST to the CRA. However, there are options if the buyer of the property plans to continue using the vacation property as a short-term rental property. In these circumstances, the seller may be able to transfer the liability to the buyer and the buyer will be responsible to pay the CRA the GST/HST. It is crucial for both the vendor and the purchaser to understand their obligations and plan accordingly. Vendors should seek professional advice before the property is listed and purchasers should seek advice before an offer is made.

For the Seller

Consider how to structure and price the property

  • Will you need to collect GST/HST?
  • Is the buyer going to use the property for personal use?
  • Is the buyer going to continue the property as a short-term rental property?

Understanding the options and requirements for when you sell the property will help you better plan for the sale of your home. It is important to seek professional advice before listing the property.

For the Buyer

Considerations for acquiring a vacation property

  • Was the vacation property a short-term rental?
  • Do you intend to use it for personal use, rental income, or mixed use?
  • Can you claim an input tax credit on the purchase of the property?

Establishing your intent with the property will better help you plan. Seeking guidance from a qualified professional will help you determine if you should register for GST/HST before your purchase, obtain specific financing for the property, and the possible GST/HST requirements.

Planning on Selling or Acquiring a Short-term Rental Property

It is important to determine if the property is subject to GST/HST, ideally with the assistance of a qualified tax professional. Understanding who is responsible for any tax liability is important for structuring the sale of the property for both the seller and the buyer. By reviewing the facts with professional guidance before the sale, the property can be sold with the tax filings and remittances being filed timely to avoid any late penalties. Additionally, proactive planning with an advisor can be used to help mitigate possible tax liabilities.

Contact McCay Duff LLP in Ottawa to Help with Short-term Rental Properties

A team of professional accountants, tax consultants, and estate planners can help you chart out a succession plan and work alongside you at all stages, handling the organizational structure and tax planning. At McCay Duff LLP, our accountants and tax planners offer a range of services, including opening and managing trusts, planning share structures, and estate planning. To learn more about how McCay Duff LLP can provide you with the best taxation and succession planning expertise, contact us online or by telephone at 613-236-2367 or toll-free at 1-800-267-6551.