B.C. has announced that the planned October 1, 2026 expansion of PST to professional services has been paused. 

The Province says the pause will maintain the existing PST exemption for professional services, including bookkeeping, accounting, architectural, engineering, non-residential real estate and security services.

What this means: The October 1 PST expansion discussed in this article is not proceeding as originally scheduled.

We'll update this article as B.C. provides further information about when the expansion may proceed.

Starting October 1, 2026, B.C. is expanding its 7% PST to certain non-residential real estate services. Before that sends anyone into a panic: a typical residential real estate commission is not caught by this change.

The new PST applies to taxable non-residential real estate services, including commissions and other trading services connected with non-residential real estate. So if you're a B.C. real estate professional, this is a bookkeeping and invoicing change you need to have sorted out before October 1.

The Line That Matters: Residential vs. Non-Residential

Sell or lease a house, condo, or other property classified entirely as residential, and the related real estate service remains outside this PST expansion. The new tax is aimed at non-residential real estate services, generally commercial, industrial and similar transactions.

B.C.'s rules tie the exemption to the property's assessment classification, rather than simply asking how the property is being used. Property assessed entirely as Class 1 (Residential) or Class 3 (Supportive Housing) is excluded from the definition of non-residential real estate services. There's also a specific exemption for qualifying Class 9 (Farm) property.

That means you shouldn't decide whether PST applies simply by looking at the words "commercial" or "residential" in a listing. The property's classification matters.

What "Trading Services" Actually Covers

This isn't limited to the commission you think of as being paid when a property sells. For PST purposes, non-residential real estate services include certain real estate services provided by someone licensed, or required to be licensed, under B.C.'s Real Estate Services Act: rental property management services, strata management services, and trading services, all specifically for non-residential real estate.

Trading services can include activities like showing real estate and finding real estate for a client to acquire. B.C. specifically states that commissions and fees on the sale or lease of non-residential real estate are taxable non-residential real estate services.

What Does the New PST Cost?

The PST rate is 7% of the purchase price of the taxable non-residential real estate service. The purchase price can include applicable fees, charges and certain disbursements.

For example: a $20,000 commercial real estate commission carries $1,400 in PST at 7%, bringing the total before GST to $21,400. GST/HST is a separate tax and needs to be considered on its own.

And unlike GST/HST, PST generally isn't something recovered as an input tax credit through your GST/HST return. For the purchaser, that makes this a real added cost in most situations, though the specific accounting and tax treatment can vary depending on the purchaser's own circumstances.

Who Needs to Register?

If you sell taxable non-residential real estate services that you'll provide on or after October 1, 2026, you generally need to register to collect and remit PST, unless an exemption or the small-seller rule applies. Registration is done through eTaxBC, and B.C. allows registration up to six months before your first taxable sale, meaning a business expecting its first taxable sale on October 1 could have registered as early as April 1, 2026.

This is one of those changes where waiting until the first taxable transaction is already sitting in your books is not a great plan. Get the registration, invoicing and bookkeeping side ready beforehand.

What About the Brokerage and the Individual Agent?

B.C.'s rules distinguish between services provided by an employee to their employer and services provided through other business arrangements.

Services a person provides to their employer in the course of employment are specifically excluded from the definition of non-residential real estate services. That means an employee agent's work for their brokerage-employer doesn't create a separate taxable real estate service simply because the brokerage later pays that agent a commission.

Where this needs a closer look is the independent-contractor structure common in real estate, an agent operating through a personal real estate corporation, or another arrangement where the agent isn't an employee of the brokerage. Those relationships aren't automatically covered by the employee exclusion. How PST applies can depend on the specific arrangement and who is legally providing the taxable service.

If your brokerage uses independent contractors or personal real estate corporations, have the structure specifically confirmed before assuming that every agent relationship is treated the same way.

Deals That Straddle October 1

This is one of the areas where the dates really matter. B.C.'s transitional rules generally provide that if consideration for non-residential real estate services is paid or becomes due before October 1, 2026, and the services are provided entirely before December 1, 2026, PST doesn't apply to that consideration.

But if services continue into December, part of the consideration can still become taxable: the portion tied to services provided on or after October 1 can become subject to PST.

So don't reduce the transition rule to "signed before October 1 means no PST." That's not the actual test. The timing of the consideration and when the services are provided both matter. A commercial deal billed and paid before October 1, where part of the service continues into December, can't automatically be treated as fully PST-exempt. If a transaction crosses the October 1 and December 1 dates, document the relevant dates and have the treatment confirmed rather than guessing.

What About Mixed-Use Property?

The same assessment-classification logic applies here. If a property is partly classified as Class 1 or Class 3 and partly classified another way, the taxable and exempt portions need to be reasonably attributed. B.C.'s rules allow the exempt portion to be determined based on the portion of the service that can reasonably be attributed to the qualifying residential or supportive-housing property.

For example, if a property is 60% commercial and 40% residential, and 40% of the service can reasonably be attributed to the residential portion, PST would apply to the remaining 60%. A mixed-use property isn't automatically 100% taxable or 100% exempt. A reasonable allocation needs to be made and documented.

What If the Property Is Being Bought as a Rental?

The buyer's intended use isn't what determines this particular exemption. The property's assessment classification is what matters. A property assessed entirely as Class 1 Residential stays outside the definition of non-residential real estate services even if the purchaser intends to use it as a rental. That distinction matters for bookkeeping, since "investment property" doesn't automatically mean "commercial property" for this particular rule.

FAQ

Does this affect the commission on a typical home sale? No. A real estate service relating to property assessed entirely as Class 1 Residential is excluded from the definition of non-residential real estate services. This expansion is specifically aimed at taxable non-residential real estate services.

What about a mixed-use property that's partly residential and partly commercial? The taxable and exempt portions generally need to be reasonably attributed. The property's assessment classification is important, and the allocation should be supported by appropriate records.

Does this apply to a residential property being purchased as a rental investment? The property's assessment classification is what matters here, not simply the buyer's intended use. A property classified entirely as Class 1 Residential is excluded from the non-residential real estate service definition.

What about farmland? Qualifying non-residential real estate services relating to Class 9 Farm property are specifically exempt. If only part of the property is classified as Class 9, the exempt portion needs to be reasonably attributed to the qualifying farm portion.

Is this the same PST expansion affecting accounting and property management services? They're part of the same broader B.C. PST expansion taking effect October 1, 2026. Accounting services and non-residential real estate services are both being added to the taxable-service rules, along with several other service categories. The specific rules and exemptions aren't identical across the different categories, though, so an exemption that applies to one shouldn't automatically be assumed to apply to another.

What You Should Do Before October 1

If you provide taxable non-residential real estate services, make sure you've dealt with PST registration, your invoicing and tax settings, the correct treatment for different property classifications, your bookkeeping accounts, commission and payment workflows, documentation for mixed-use transactions, and any transactions that cross the October 1 and December 1 transition dates.

This is exactly the kind of tax change that can look simple on the surface and become messy six months later when the books don't match the PST returns. Get the setup right before the first taxable transaction hits your books.

Follow the system. File with confidence.