Canadian Goods & Services Tax (GST) Reduction
Effective January 1st, 2008, the GST was reduced to 5%. The Realty Management System version 07.11.01 automatically revised the tax rates in your tax setup option (E.1.2). Tax for A/P and agent expenses will be calculated according to the date you use on the invoice, and the posting date for the chargeable item code.

The tax is calculated on your trades using the Close Date on the Key Info screen of the deal (2.1). The Realty Management System will re-calculate the tax rate for your pending deals with a closing date on, or after 01/01/08, at 5%. If you want your deal calculated at 6%, the close date must be less than 01/01/08.

You can print re-calculated trade records for deals closing on or after 01/01/08 in menu option 2.T. In order for the tax rates to be automatically re-calculated on your deals, please ensure that the Tax fields for your Trade Classifications (I.3.2), and your Fees (E.1.3), are set to "Default". This will tell the system to use the default tax rate setup in E.1.2.

Please remember that the letter you send out when a deal firms up is a reminder that commissions will be invoiced on the date of closing. It is not an invoice; therefore the GST is not calculated until the deal closes. There are some misconceptions regarding the tax change relative to real estate sales, the important distinction to be aware of, is that your office is charging tax on commissions, not on the sale of the property itself.