Commercial leases

Generally, commercial leases from a landlord who is registered for the GST/HST are taxable.

Property taxes paid by a tenant are to be treated as part of the payment to the landlord for the rental of the real property, even if the tenant pays the taxes directly to the municipality. Therefore, the amount of property taxes payable by a tenant is considered to be part of the rent and is subject to GST/HST in the same way as the amount of rent payable by the tenant. This will be the case whether or not the rental agreement states that the payment of property taxes by the tenant is to be considered as "rent" or "additional rent"

However, if a tenant is directly liable to the municipality for the payment of property taxes, this amount is not subject to GST/HST.

Forms and publications

• GST/HST Memoranda Series Chapter 19-4-1, Commercial Real Property - Sales and Rentals