On July 1, 2010, the provincial and federal governments will combine the 7% provincial sales tax (PST) and the 5% federal Goods and Services Tax (GST) into a 12% Harmonized Sales Tax (HST). Here is updated information, verified by Canada Revenue Agency.
BC New Housing Rebate
Home Buyer's may be eligible for a BC New Housing Rebate if they buy, as their primary residence:
-a new home together with land;
-a new home together with leased land;
-a new mobile home or float home;
-a new home purchased through shares in a housing cooperative; or
-a home constructed or substantially renovated (more than 90%) by the owner-builder.
Purchaser's of new homes priced up to $525,000 will be eligible for a rebate of 71.43% of the provincial portion (7% of the HST’s 12%) of the HST paid on the new home up to a maximum rebate of $26,250. Homes priced at more than $525,000 will be eligible for a flat rebate of $26,250.
|
Price |
Gross HST |
GST rebate |
PST rebate |
Net HST |
Net Price |
|
$350,000 |
$42,000 |
$6300 |
$17,500 |
$18,200 |
$368,200 |
|
$400,000 |
$48,000 |
$3150 |
$20,000 |
$24,850 |
$424,850 |
|
$450,000 |
$54,000 |
$0 |
$22,500 |
$31,500 |
$488,500 |
|
$500,000 |
$60,000 |
$0 |
$25,000 |
$35,000 |
$543,000 |
The federal GST new housing rebate is 36% of the tax paid on the first $350,000 of the home price. The GST rebate is phased out for homes priced between $350,000 and $450,000.
Up to $350,000, if the home will be your primary residence, the total HST that will be payable is 5.2%. Currently, with only GST applicable the tax paybale for this price point is 3.2%. Gotta love those rebates!
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Presales
Agreements signed on or before November 18, 2009
Purchaser's who buy a presale residential property and they:
-have an agreement dated on or before November 18, 2009 and if they take ownership and possession before July 1, 2010, they will NOT pay the HST and will NOT be eligible for a BC New Housing rebate. They will pay the GST and may be eligible for a GST rebate.
-buy a presale property and the agreement is dated on or before November 18, 2009 and they take ownership and possession on or after July 1, 2010 , they will NOT pay the HST and will NOT be eligible for BC New Housing Rebate. They will pay the GST and may be eligible for a GST rebate.
Agreements signed after November 18, 2009
Purchaser's who buy a presale property:
-If the agreement is dated after November 18, 2009 and they take ownership and possession before July 1, 2010, they will NOT pay the HST and will NOT be eligible for a BC New Housing Rebate. They will pay the GST and may be eligible for a GST rebate.
-the agreement is dated after November 18, 2009 and they take ownership and possession on or after July 1, 2010, they will pay the HST and may be eligible for a BC New Housing Rebate.
Leased land
Purchaser's who buy, as their primary residence a new detached home or duplex together with leased land from a builder for their primary residence, they may be eligible for the BC New Housing Rebate, up to a maximum of $26,250.
Vacant land
Purchaser's who buy a lot from an individual (not a developer)
-who has never used it for business purposes, they will be exempt from paying the HST.
-buy the lot from an individual who has subdivided it into more than two lots (three or more lots), or from a developer, you will pay the 5% GST if the possession date is before July 1, 2010, even if the title transfers on or after July 1, 2010. If possession is transferred after July 1, 2010, you will pay the 12% HST.
If you plan to build a home, and the majority (90%) is completed on or after July 1, 2010, you will pay the HST and may be eligible for the BC New Housing Rebate.
If you sell personal use vacant land and the sale is now exempt from the GST, the sale will be exempt from the HST on or after July 1, 2010.
New Rental Housing Rebate
To support affordable rental housing, there is a new BC Rental Housing Rebate. If you construct or substantially renovate a residential property to rent to tenants, you may be eligible for a rebate of 71.43% of the provincial portion of the HST to a maximum of $26,250 per unit priced up to $525,000. There is a flat rebate of $26,250 for units priced above $525,000.
To qualify, the first use of the housing would be occupancy or use by a renter or by the builder as a primary residence for at least one year.
Eligible units include:
-a detached, attached or condominium apartment, with or without a legal secondary suite;
-a mobile or float home;
-units in a multiple unit building including long-term care residential facilities; or
-the land component of a single-unit or multiple-unit building where the land is leased or is a housing cooperative.
You will NOT be eligible for the BC New Housing Rebate if you buy a new property which is not your principal residence and you do not rent it out.
Rental of land
The New Rental Housing Rebate will also be provided to landlords who make an exempt rental of land for residential use, for example they rent out a residential lot or site in a residential trailer park, as a result they would be required to self-assess and pay HST under the self-supply or change-in-use rules. The rebate is 71.43% of the provincial component of the HST paid up to a maximum of $8,663 (33% x $26,250) for each lot or site.
Will residential landlords pay the HST?
Landlords that currently pay the GST, they will pay the HST on maintenance, electricity, cable television and other services provided to tenants.
They will not be able to claim input tax credits and will not be allowed to recover the HST from tenants because owning residential rental property is an exempt activity and landlords can’t register for the GST/HST.
Parking spaces
If you rent a parking space the HST will apply as of July 1, 2010.
Resale homes
The HST applies only to new homes. It does not apply to resale homes.
Buying either a new or a resale home
The 12% HST will be charged on a range of goods and services including:
-home renovations;
-appliances, insulation, windows and doors;
-residential utility costs, such as hydro, telephone, cable, but excluding natural gas;
-closing costs such as appraisals and inspections;
-moving costs
-REALTOR® fees or commissions (currently it is 5% GST)
The HST is not the PTT
The Property Transfer Tax (PTT) is a separate provincial tax on all property transfers. The rate is 1% on the first $200,000 and 2% on the remainder of the property price and charged on the price of the property before the GST/HST is applied. Eligible first-time home buyers may qualify for a PTT exemption for homes priced up to $425,000.
For information about the PTT, visit:
http://www.sbr.gov.bc.ca/individuals/Property_Taxes/Property_Transfer_Tax/ptt.htm
The above information is written as an example and it is recommended that you seek independent legal advice for additional information pertaining to the HST for Real Estate matters. For Information about the GST/HST phone the Canada Revenue Agency at 1.800.959.8287