A major factor that comes into play when buying a new home is Harmonized Sales Tax, or HST. The following is based on information gathered from British Columbia Real Estate Association (www.bcrea.bc.ca), the following is simplified version of the HST and how it applies to New Homes.
When Effective and what it is.
- Effective July 1, 2010
- HST combines 7% PST and 5% GST
HST & Real Estate
- An additional tax on home ownership, realtor commissions, appraisals and other services
- All subject to 12% tax instead of 5% GST
Relief for Buyers
- Partial rebates are be in place
- Homes up to $525,000 will bear no more tax than under the current PST system
- Over $525,000 will receive a flat rate rebate of $26,250 – this is essentially 7% more tax less the rebate of $26,250
- Under $525,000 – there will be rebates on the PST (7%) portion of 71.43% and the GST (sliding scale)
HST rebates are available for new home purchasers on a sliding scale basis. In the most simplest form, the higher the purchaser price, the lower the rebate. The $525,000 benchmark represents the purchaser price where no rebates are applicable. Rebates are provided for home purchasers who intend to live in their new home or rent their home. Rebates are not applicable for home purchasers who use it as a second home or as vacation homes. A link to a simple HST calculator provides you a guideline to what the HST means to you.
(This Calculator was created by Conrad Warkentin, a Real Estate Lawyer at Rosborough & Co., and is not to be relied upon for making actual HST calculations or determinations which should be verified through CRA)
