November 2025 - Legal Update - Purchasing Land As A Corporation

When purchasing land as an Ontario corporation, it is important to understand the benefits and obligations specific to incorporated entities. The goal for this newsletter is to help our readers avoid common pitfalls regarding the incorporation process and discuss ways information can be organized for easy retrieval in the future. One common pitfall for corporations is failing to set up a company well in advance of their closing date. Purchasers may not know if they need an HST number and may not give themselves enough time to set one up before closing. While having an HST number is not strictly necessary to own land in Ontario, HST may apply to certain types of land, such as severed parcels, land intended for development, or commercial properties. In these cases, a vendor typically requires the payment of HST in addition to the purchase price, which means an additional 13% of the purchase price is due and payable on closing. However, if the purchaser is an HST registrant, they may self-assess and remit the tax directly to the Canada Revenue Agency (CRA). The company can offset the amount owing for HST against any input tax credits related to other expenses, including capital expenditures, effectively reducing the net HST the corporation must remit to the CRA. It is important to work well in advance with a trusted accountant to learn what is and is not permitted and the timing for your Corporation’s tax payments. Diligent recordkeeping with a corporation’s minute book is important for those looking to buy land through a business. The corporate register must detail each property's municipal address, legal description, acquisition and sale date. Failure to maintain this information can lead to fines and penalties for a corporation and its directors. Fortunately, law firms have developed streamlined tools to manage your minute book digitally. This ensures transparency and ease of access to your corporate data. If you are looking to purchase land through a corporation and are looking for guidance on how to close your transaction seamlessly, do not hesitate to reach out to Liddiard Law at (905) 932-5437. Michael Craig Liddiard, BA MA JD (905) 932-5437 [email protected] Liddiard Law Professional Corporation