HST Update for New Home Purchases in BC…

Rebate Threshold and Transitional Rules for New Housing

The Province is proposing to increase the threshold for the BC HST new-housing rebate from $400,000 to $525,000 to ensure that, on average, purchasers of new homes up to $525,000 pay no more tax due to harmonization than is currently embedded as PST.

The government has also increased the rebate of the provincial portion of the HST paid on a new home to a maximum of $26,250.

This represents a 30 per cent increase over the original government proposed home price threshold of $400,000 and maximum rebate of $20,000.

The Province is also proposing transitional rules for new housing. The provincial portion of the HST would not apply to sales of new homes where ownership or possession is transferred before July 1, 2010. 

In addition, sales of new homes under written agreements of purchase and sale entered into on or before November 18, 2009, would generally not be subject to the provincial portion of the HST, even if both ownership and possession are transferred on or after July 1, 2010.

This is good news for the Real Estate Board and proof that our lobbying efforts produce results.

In October, 2009, the Board asked the government to raise the threshold for the HST on new homes as well as the new housing rebate.

“We heard the concerns from consumers and industry about how the HST might affect home buyers, and this increase will move the threshold to above the average new home price in the province,” said the Hon. Colin Hansen, Minister of Finance.

Clearly the government listened to us in the real estate sector.