What’s the impact of the HST when buying a home?
The BC government’s move to introduce a harmonize sales tax, or HST, that combines the federal and provincial sales taxes into a single 12% will mean increased costs for some homebuyers.
Most importantly, new homes in BC will be subject to the 12% HST. Re-sale homes are not subject to the HST.
According to the BC Real Estate Association, “To offset the increase in costs, the BC Government is offering a partial rebate of the HST for new housing, intending that new homes up to $525,000 should bear no more tax than under the previous PST system. Homes above $525,000 will receive a flat rebate of $26,250. New home sales over $525,000 will be impacted, as buyers will have to pay an additional 7% tax less the $26,250 flat rebate.”
“On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province.”
The British Columbia Harmonized Sales Tax of 12% HST is also applicable to any costs and fees associated with your property/home purchase including legal/notary fees, real estate commissions and other closing costs.