UNDERSTANDING THE HST

• HST of 12% (5% federal component plus 7% provincial component) will apply to new residential housing and the PST will be eliminated completely.
• Before HST, PST had been paid on all materials used in the construction of a home. This PST was embedded in the cost of a new home. It is estimated that this embedded PST added 2% to the cost of a new home.
• With HST, builders can now claim a rebate for the provincial portion of the HST purchases, reducing the price of a new home by 2%*.
• For new housing purchased as a primary residence, all home buyers who purchase a new home will receive a rebate of 71.43% of the provincial portion of the HST to a maximum of $26,250.

HOME PURCHASES	HST
New homes up to $525,000	HST Less Rebate 1
New homes over $525,000	HST Less Rebate 2
Previously occupied homes	No HST

 

1. BC will provide a rebate of 71.43% of the provincial portion of the HST to a maximum of $26,250 for new housing purchased as a primary residence.

2. Purchasers of eligible new homes over $525,000 are eligible for a maximum rebate of $26,250.

To calculate your HST rebate:

Home Price x 7% (BC Portion of HST) x 71.43%

e.g. $400,000 x 7% = 28,000 x 71.43% = $20,000 rebate

 

*there will be transitional rules in effect for partially constructed homes or homes that are the subject of incomplete transactions.

GST REBATES 

 

New home buyers may be eligible for the federal GST new housing rebate, which generally equals 36% of the tax paid on the first $350,000 of the purchase price.

The amount of the GST rebate is phased out on a straight-line basis for homes priced between $350,000 and $450,000.

For a purchase price over $450,000 there is no rebate.

 

PURCHASE PRICE	GST PAYABLE	REBATE
Up to $350,000	5%	36% of total GST – maximum rebate $6,300
Between $350,000 and $450,000	5%	Max rebate of $6,300 times (450,000 minus purchase price) divided by 100,000 (see example below)
Over $450,000	5%	No rebate

e.g. Purchase price $400,000 – to calculate GST rebate:
6,300 x 50,000 (450,000-400,000) divided by 100,000 = $3,150 rebate

 

PROPERTY TRANSFER TAX

In British Columbia, you pay property transfer tax each time you register a property at the Land Title Office.
If the market value is $200,000 or less, the tax is 1%. If the market value is greater than $200,000, the tax is 1% of the market value up to $200,000, plus 2% on the portion of the market value that is greater than $200,000.

First Time Homebuyers* are exempt.

*as defined by Government of BC

For the latest information, please visit http://www.cra-arc.gc.ca/whtsnw/menu-eng.html