Does a tenent pay GST on a Commerical lease. for example if he pays 500 for rent a month do i charge 6% GST.?

Answer 1

I am Canadian, and the answer is yes.

GST is applicable to commerical lease.
example: 500/month rent, 6% is $30. Total payable to you is $530.

GST is collected on the rent, and your tenent can claim any refund if they eligible.

Answer 2

It is my understanding that you may be required to charge GST. It depends on the legal structure of your operation, your income level and to what degree the rental income is part of your business operation.

It is best for you to check with CCRA and or your own Accountant, to make sure you set out the correct procedure within the paperwork of your lease agreement.

As you will likely know, commercial leases are in large part contractual agreements, which are governed by a some what minor set of laws of each jurisdiction. Compared to residential leases, that are mostly governed by provincial laws and very little can be altered with in the lease agreement.

For you therefor it becomes very important to ensure all the bases are covered within your lease agreement, as nothing will be assumed, unless it is in writing and dealt with inside of the contract. (Hence the reason that commercial lease agreements are often 30 + pages long)

Good Luck

Answer 3

I assume you are referring to a sales tax, and in Tennessee the reply is no, rents are not subject to a sales tax.

Real estate is treated differently than personal property such as cars and trucks which have a sales tax applied. I would expect it to be rare if at all that any state would impose a sales tax on real property leases.

I'd be more concerned with the terms of the lease, that being that I am getting all I am entitled to, have rent increases and proper common pass thur issues covered, that I have sufficient knowledge of lease terms and what is customary in my market, that I do not violate the law or tenants rights and subject myself to a lawsuit.