Harmonized Sales Tax Update for New Home Purchases in BC...
Rebate Threshold and Transitional Rules for New Housing
The British Columbia Government is proposing to increase the BC HST new housing rebate threshold from $400,000 to $525,000. As a result purchasers of new homes up to $525,000 pay no more tax due to harmonization than is currently embedded as PST.
The Province is also proposing transitional rules for new housing (click on above link). Where ownership or possession is transferred before July 1, 2010, the provincial portion of the HST would not apply to sales of new homes.
What is good news for one of my investor clients is that sales of new homes under written agreements of purchase and sale entered into on or before November 18, 2009, would generally not be subject to the provincial portion of the HST, even if both ownership and possession are transferred on or after July 1, 2010.
Before going off to Dubai in October my clients entered into an aggrement for a new-home purchase in Coquitlam where possession will be in 2012, and will therefore be PST portion exempt.
The government has also increased the rebate of the provincial portion of the HST paid on a new home to a maximum of $26,250. This represents a 30 per cent increase over the original government proposed home price threshold of $400,000 and maximum rebate of $20,000.
This is good news for the Real Estate Board and proof that all of our lobbying efforts produce results.
In October, 2009, the Board asked the government to raise the threshold for the HST on new homes as well as the new housing rebate.
"We heard the concerns from consumers and industry about how the HST might affect home buyers, and this increase will move the threshold to above the average new home price in the province," said the Hon. Colin Hansen, Minister of Finance.
"...Don't ask me what I want it for, If you don't want to pay some more, 'Cause I'm the taxman, yeah, I'm the taxman"
Clearly the BC government listened to us in the real estate sector.
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