By Peter Borszcz / HST, Taxes /

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 PriceGross HST (12%)Rebate AvailableNET 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, 2013Transition Tax Rebate to BuilderRebate (Ex: 500k Home)TTax Paid by Home Buyer (500k home)
<10%N/A$010000
10-25%1.50%750010000
25%-50%1.00%500010000
50%-75%0.50%250010000
75%-90%0.20%100010000
>90%0.00%010000

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.

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 in the law firm of Montgomery Miles & Stone Law Firm.

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