Will the Harmonized Sales Tax In British Columbia Affect You?

Buying a newly constructed home in British Columbia? Under the harmonized sales tax that went into effect in British Columbia in July, 2010 you may pay more - or not.  Since then, there have been many questions about the impact HST will make on the local real estate market and other areas of commerce. It also seems that some confusion remains on where the tax is applicable and who it will affect.

The harmonized sales tax applies to the purchase price of a new construction home, service fees, and commissions associated with any real estate transaction; it does not apply to the purchase price of a home that is considered a resale.

The rebates are based on the purchase price. For new homes listed below $525,000, the rebate amounts will vary by purchase price. For those purchasing a newly constructed home that has a price of $525,000 or more, they will receive a flat rebate of $26,250.

According to the BC government, new homes that sell for under $525,000 will bear no more tax burden than they would have under the GST.  For those who are impacted by the HST, there are rebates available to help offset the cost of the program.

Will the HST remain in effect?

Recently, a petition against the HST was presented to the government. The end result is that a referendum would be held September 24th, 2011. BC election officials have said the referendum could cost as much as $30 million if British Columbians cast ballots, and around $12 million if it is done by mail. Even the way the issue will be decided seems to be unresolved, but the bottom line is, what does this mean for potential homeowners in the meantime?

Remember, the HST does not apply to the purchase price of a home that is considered a resale. It will still apply to service fees, appraisals and commission pertaining to the sale of a new home. If you are buying a new construction home where the purchase price is below $525,000, the impact of the tax will be partially offset by the rebate program.

Need all the details to see if the harmonized sales tax will affect you?  If you have questions about buying a home in the Kamloops area and the effect the HST will have on your purchase, call Eric Putoto. You can also find information for buying a home at Platinum Realty Inc.

Eric Putoto is ONLY Canadian Realtor and Brokerage owner to have been granted an exclusive License for the most advance home selling system ever developed: the Maximum Value Home Selling & Buying Systems.