Tax Updates

Indirect tax issues affecting cash flow in the real estate sector

July 17, 2020

Authored by RSM Canada LLP

John Greenidge shared this article


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The pandemic and near shutdown of local, national and global economies have presented cash flow challenges for businesses across sectors. This white paper provides an overview of several goods and services tax and harmonized sales tax (GST/HST) and Quebec sales tax (QST) issues that affect the cash flow of businesses in the real estate sector, including construction companies, developers of commercial and residential properties for sale, as well as owners and managers of commercial and residential rental properties. We also discuss particular opportunities in this sector relating to public service bodies, including charities and nonprofit organisations.

The following topics are discussed in the white paper:

  • Purchases by real estate businesses engaged in taxable activities
  • Purchases by developers and owners of residential rental properties
  • Special considerations for public service bodies, including charities and nonprofit organisations
  • Special organisational structures and mixed-use properties

Please reference insights shared about general indirect tax strategies to generate or preserve cash flow during these difficult times. The federal government and some provincial governments have extended the remittance deadlines for GST/HST, QST, PST, and other indirect taxes.

In addition, we have identified numerous ideas beyond tax considerations; our clients are availing themselves of helpful guidance in the following areas:

  • Federal, provincial and local stimulus
  • Grants and other incentives programs, such as the Emergency Commercial Rent Assistance Program
  • Corporate finance and borrowing options
  • Restructuring and insolvency

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This article was written by Ibrahim Hatia, Rob Allwright and originally appeared on 2020-07-17 RSM Canada, and is available online at

The information contained herein is general in nature and based on authorities that are subject to change. RSM Canada guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM Canada assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

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