Is GST Charged on Commercial Property in BC?

Yes. In BC, the sale of commercial real property is generally a taxable supply, so 5% GST applies to the purchase price. BC does not charge HST, and PST does not apply to the sale of land and buildings. How the GST is paid depends on the buyer: if you are registered for GST and not an individual buying housing, the seller usually does not collect the tax and you report it yourself to the Canada Revenue Agency (CRA). If you are not registered, the seller collects it on closing. Either way, BC property transfer tax is charged on top. This guide explains the rules buyers should ask about before they write an offer on commercial property in Surrey or anywhere in BC.

This article is general information, not tax advice. GST on real property has many exceptions. Speak to your accountant and lawyer about your specific purchase before you remove conditions.

Which property sales are subject to GST?

The CRA treats a sale of real property as a commercial activity unless it is an exempt supply. Real property includes land, buildings and interests in them. In practice, the following are usually taxable:

Office, retail, industrial and warehouse buildings.
Commercial plazas and mixed-use buildings, for the commercial portion.
Vacant land sold by a business or a GST registrant.
Newly built or substantially renovated housing sold by a builder.

The main exemption buyers hear about is used residential property. A resale of housing that was last used by an individual as a place of residence is generally exempt, which is why most resale home purchases carry no GST.

Who pays the GST, the buyer or the seller?

The buyer bears the tax. The question is who sends it to the CRA.

Normally the seller collects GST and remits it. But the seller does not collect the tax when the purchaser is registered for GST/HST, unless the purchaser is an individual buying a residential complex. In that case the purchaser self-assesses: it calculates the GST on the price and reports it to the CRA directly.

Your purchase contract should say whether the price includes or excludes GST. Most commercial contracts state the price is "plus GST" and require the buyer to give its GST registration number and confirm it will self-assess. If the contract is silent, there can be an argument about whether the tax was already included in the price. Ask your lawyer to settle this wording before you sign.

How does a registered buyer report the GST?

It depends on how the property will be used.

Used primarily in commercial activities. A registrant that will use the property primarily (more than half) in taxable commercial activities reports the GST on its regular GST/HST return. It can usually claim an input tax credit for the same amount on that return, so in most cases no cash changes hands.
Not used primarily in commercial activities. Other purchasers who must self-assess file Form GST60, the GST/HST Return for Purchase of Real Property, and pay the tax. The GST60 is due by the end of the month after the month the property was bought.

For an owner-user, such as a contractor buying a shop or a distributor buying a warehouse, the first case usually applies. For an investor buying a building to lease out, the leasing is normally a taxable commercial activity, which also points to the first case. Your accountant should confirm this before closing.

What if I am not registered for GST?

The seller collects 5% GST from you on closing, usually through the lawyers' statement of adjustments. You will need cash for it on top of your down payment and closing costs. If you will be running a taxable business from the property, ask your accountant whether you should register before closing so you can self-assess and claim an input tax credit instead.

Does GST apply to a mixed-use building?

When a property is partly residential and partly commercial, such as shops on the ground floor with apartments above, each part can be treated as a separate supply. The commercial part is generally taxable and the used residential part may be exempt, so the price is split between them on a reasonable basis. This is a common source of mistakes. Agree the split, and how it will be documented, with your accountant and lawyer before closing.

Is there a GST election when buying a business?

When you buy all or substantially all of the property needed to carry on a business, the buyer and seller may be able to jointly elect under section 167 of the Excise Tax Act, using Form GST44, so that no GST is payable on most of the assets. The CRA's guidance notes an important limit: if the purchaser is not a GST registrant, a taxable sale of real property that is part of the deal is still subject to tax. If your purchase includes both a business and the building it operates from, ask your accountant early how the election and the real property will be handled.

Is farmland or land held personally treated differently?

It can be. Sales of personal-use real property and some farmland transactions between individuals have their own rules, and some transfers, such as gifts of farmland or personal-use property, are exempt. These cases turn on the facts, so get advice specific to the property.

Do I pay property transfer tax as well as GST?

Yes. BC property transfer tax applies to most transfers of commercial property in addition to GST. It is calculated on the fair market value at registration and is paid on completion. See our guide to property transfer tax in BC for the rates and a worked example.

Is GST charged on realtor commission?

Yes. Real estate commission is a taxable service, so GST is added to the commission on both sales and leases. On a commercial sale, a GST-registered seller can usually claim that GST back as an input tax credit.

A simple example

Illustrative only: a GST-registered company buys a $3,000,000 industrial building in Surrey to run its own business. GST at 5% is $150,000. The seller does not collect it because the company is registered. The company reports $150,000 of GST owing on its next GST/HST return and, because it will use the building primarily in its commercial activities, claims an input tax credit for the same amount on that return. The company still pays BC property transfer tax and its legal and closing costs in cash.

If the same building were bought by an individual who is not registered, the seller would collect the $150,000 on closing.

Questions to settle before you write an offer

Is the price stated as plus GST or including GST?
Is the buyer registered, and under what name and number?
Will the property be used primarily in commercial activities?
Is any part of the property residential?
Is a business being bought along with the property?

Our team helps clients buy and sell commercial property across Surrey, White Rock and the Fraser Valley, and we make sure these questions reach your accountant and lawyer before conditions are removed. If you are an owner-user, see how to buy property for your business, or explore commercial real estate in Surrey with us.

Frequently asked questions

Do you pay GST on commercial property in BC?

Generally yes. A sale of commercial real property is a taxable supply, so 5% GST applies to the price. BC has no HST, and PST does not apply to land and buildings.

Who pays GST when buying commercial property?

The buyer bears it. If the buyer is GST-registered and is not an individual buying housing, the seller does not collect it and the buyer self-assesses. Otherwise the seller collects it on closing.

What is Form GST60?

It is the CRA return a purchaser uses to report and pay GST on taxable real property when the seller did not collect it and the property will not be used primarily in the buyer's commercial activities. It is due by the end of the following month.

Can I claim the GST back on a commercial building?

A registrant that uses the property primarily in taxable commercial activities can usually claim an input tax credit for the GST on its regular return. Confirm your situation with your accountant.

Is GST charged on a used home?

Generally no. A resale of housing last used by an individual as a place of residence is usually exempt. New or substantially renovated housing sold by a builder is taxable.

Do I pay property transfer tax on commercial property too?

Yes. BC property transfer tax applies to most commercial property transfers in addition to GST and is paid on completion.

Sources

Rates, thresholds and program rules in this article were checked against these official pages on October 14, 2026. Rules change, so confirm current details before you act.