HST Transition Rules for Housing

The Province announced the HST Transition rules on February 17, 2012 as the Province transitions back to the PST/ GST system on April 1, 2013.

Used Residential Homes (most resales) are, and remain, exempt from HST.

1. Under the current system, there is no additional rebate for new homes greater than $525,000 – Effective April 1, 2012, for homes completing prior to April 1, 2013, this rebate threshold has been increased to $850,000, meaning that the maximum rebate available (for homes worth 850k) is $42,500. This provincial portion HST rebate will also be available to secondary or vacation residences located outside the lower mainland.

Effective HST on Homes (Primary Residence)  – April 1 2012 to April 1 2013

Purchase Price Gross HST (12%) Rebate Available          NET Purchase Price
$100,000.00 $12,000.00 $6,800.00 $105,200.00
$150,000.00 $18,000.00 $10,200.00 $157,800.00
$200,000.00 $24,000.00 $13,600.00 $210,400.00
$250,000.00 $30,000.00 $17,000.00 $263,000.00
$300,000.00 $36,000.00 $20,400.00 $315,600.00
$350,000.00 $42,000.00 $23,800.00 $368,200.00
$400,000.00 $48,000.00 $23,150.00 $424,850.00
$450,000.00 $54,000.00 $22,500.00 $481,500.00
$500,000.00 $60,000.00 $25,000.00 $535,000.00
$550,000.00 $66,000.00 $27,500.00 $588,500.00
$600,000.00 $72,000.00 $30,000.00 $642,000.00
$650,000.00 $78,000.00 $32,500.00 $695,500.00
$700,000.00 $84,000.00 $35,000.00 $749,000.00
$750,000.00 $90,000.00 $37,500.00 $802,500.00
$800,000.00 $96,000.00 $40,000.00 $856,000.00
$850,000.00 $102,000.00 $42,500.00 $909,500.00
$900,000.00 $108,000.00 $42,500.00 $965,500.00
$950,000.00 $114,000.00 $42,500.00 $1,021,500.00
$1,000,000.00 $120,000.00 $42,500.00 $1,077,500.00

2. For new homes where construction begins before April 1, 2013, BUT where possession transfers after April 1, 2013, neither HST nor PST will be payable, but rather purchasers will pay a temporary, transitional provincial tax of 2% per cent on the full house price in addition to the GST payable.

3. Special Transition Tax Rebates will be available to real estate developers and home builders who commence a home prior to April 1, 2013 but where it is sold after April 1, 2013 to prevent double taxation based on the extent of completion on April 1, 2013.

% complete April 1, 2013 Transition Tax Rebate to Builder Rebate (Ex: 500k Home) TTax Paid by Home Buyer (500k home)
<10% N/A $0 10000
10-25% 1.50% 7500 10000
25%-50% 1.00% 5000 10000
50%-75% 0.50% 2500 10000
75%-90% 0.20% 1000 10000
>90% 0.00% 0 10000

For a complete breakdown under 3 different tax systems, check out my post here.

Realtors and Developers: please be advised there are special contract rules with respect to the enhanced HST Rebate and Transition Tax, find more info at my post here.

Proviso: This information here has not yet become law and is based on the discussion papers published by the Government of British Columbia. These rules may change as the legislation progresses through the BC legislature.

Peter Borszcz is a Real Estate Lawyer and Business Lawyer practicing in Kelowna, BC and a shareholder in the law firm of PIHL Law Corporation.

The provincial government press release can be found here. The federal government rules can be found here.

5 thoughts on “HST Transition Rules for Housing

  1. Pingback: HST – Key Points for Realtors | BC Real Estate Law Blog

  2. Pingback: Writing New Home Contracts under the HST Transition Rules | BC Real Estate Law Blog

  3. Pingback: Comparing HST and Transition Tax for New Housing | BC Real Estate Law Blog

  4. Pingback: Kelowna Real Estate : The New Provincial Government HST Transition Rules for New Home Sales

  5. Pingback: HST Transition Rules for Housing « Sherlock + Associates

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