The HST is coming to BC and it may end up costing you more on the purchase of a home in Vancouver and all of BC. Currently the GST (5%) minus any applicable New Housing Rebate applies to new and substantially renovated properties. The new HST (12%) replaces the GST and comes into existence on July 1, 2010. You may be eligible for a new housing rebate after this date.
Here’s a breakdown of how the new tax will work:
- A rebate will apply to properties up to a maximum price of $525,000.
- The rebate is equal to 71.43% of the provincial portion (7%) of the HST payable up to a maximum rebate of $26,250
- Homes above $525,000 will receive a flat rebate of $26,250.
- HST is only applicable to new or substantially renovated (more than 90%) properties – resale properties are exempt.
- The new housing rebates will be administered by the Canada Revenue Agency.
- New Rental Housing will be eligible for a rebate
- Recreational Property not used as a primary residence will not be eligible for any rebate.
There is a vocal lobby challenging the legality of the new tax but it will likely take months or years for the courts to decide if the tax is here to stay in its initial implementation. Don’t hold your breath waiting for an end to the new tax.
Links to further government information:
- Canada Revenue Agency: Housing Rebate and Transitional Rules Q&As
- Province of British Columbia: New Housing Rebate
Please leave any questions and/or comments below and I’ll get back to you with further information.(information courtesy of the Real Estate Board of Greater Vancouver, Government of British Columbia and Canada Revenue Agency)