HST and PST Transition Rules are now on the Books for New Home Buyers in BC as of April 1, 2012!

(No this is not an April fool’s joke either…)NO HST

The government announced on Friday, February 17, 2012 that the HST and PST will finally have transitional rules for new home purchases and an Enhance New Home Rebate.

As the province shifts back to the PST system, the HST will be replaced effective April 1, 2013.

There are a few new measures being taken to ease the HST burden on new home buyers which includes:

– The BC New Housing Rebate will increase from $26,250 to $42,500 effective April 1, 2012.

– The housing rebate threshold will increase from $525,000 to $850,000 so that more than 90% of newly built homes will now be eligible for a provincial HST rebate effective April 1, 2012.

– Secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts purchased with a price of up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012 as well.

– Rental properties built specifically for tenants will receive the same grant noted above, provided that the owner rents out the property as a primary residence for the first year to qualify for the grant.

– For new homes built before and completed by April 1, 2013, but with ownership and possession occurring after that date, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.

– Presale homes have a number of rules depending on when the agreement was signed and when the new owner will take possession. To understand these rules please refer to the Real Estate Board of Greater Vancouver’s information article about the new HST/PST housing transitional rules.

The goal of these HST/PST transition rules is to ensure that whenever purchasers buy a new home they will all pay a consistent and equitable amount of tax, whether the home is built, entirely under the HST, entirely under the PST or partly under HST and partly under the PST. These temporary housing transition rules will be in place until March 31, 2015.

If you would like more information regarding these rules you can refer to www.pstinbc.ca or contact Harriet Permut, Manager, Government Relations, at hpermut@rebgv.org or please phone the Canada Revenue Agency HST ruling line at: 1.800.959.8287

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