The general rule for the reduction of the GST from 7 per cent to 6 per cent as it applies to taxable sales of real property is as follows:

- if ownership or possession of the real property is transferred before July 1, 2006, 7 per cent GST applies; and
- if ownership and possession of the real property are transferred on or after July 1,2006, 6 per cent GST applies.

This general rule will apply to a sale regardless of when the agreement of purchase and sale was entered into, except in the case of a sale of a residential complex where the agreement of purchase and sale was entered into on or before May 2, 2006 (the date the GST rate reduction was announced in Budget 2006).

Special Transitional Rule for Residential Complexes:

In the case of a sale of a residential complex (as that term is defined in the Excise Tax Act) the general rules will apply with one exception as follows:

- if the agreement of purchase and sale is entered into on or before May 2, 2006 and both ownership and possession are transferred on or after July 1, 2006, the 7 per cent GST applies. However, the purchaser will be entitled to a transitional rebate adjustment.