An update on GST changes

May 1, 2013 | By

With the recent elimination of HST, our old familiar friend -GST- has already had some changes made to it within the short month of its re-introduction. Both the Primary Place of Residence Rebate, and the Transition Tax have been affected, and are explained as follows.

Firstly, for those of you who forgot, or were not “of age” when GST was in affect the rate is 5%

Secondly, you should know that GST is not applied to a used residential housing purchase.

GST is payable only on the purchase price of newly constructed, or substantially renovated residential homes. Substantially renovated is defined in the legislation as – the removal or replacement of most of the house construction components, except for the foundation, external walls, interior supporting walls, floor, roof and staircase.

Primary Place of Residence – REBATE NOTICE

A “primary place of residence” is a home that you own, jointly or otherwise, and intend to live in on a permanent basis. To be eligible for this rebate, it must be evident upon buying this home that it is for you to live in.

A recreational cottage, an investment property, or a retirement property for your future – do not qualify.

This New Housing Rebate equals 36% of the GST, but only applies for new homes priced up to $350,000.

After that point, there is variable math equations involved, and I would be happy to better explain this as needed.

Transition Tax – The Facts

If you have, or will be purchasing your home between April 1, 2013 and April 1, 2015, AND the property is at least 10% constructed as of April 1, 2013, Purchasers will pay a temporary transitional provincial tax of 2% on the full purchase price. This tax will not apply if the closing is after March 31, 2015 OR if the construction is not 10% complete as at April 1, 2013. There are no rebates for this tax.

Floating Homes and Mobile Homes – GST Free?

No, for a purchase of a newly constructed or substantially renovated mobile home or floating home, 5% GST will apply on the purchase price of the mobile home or floating home. You will be able to claim the various rebates, as they apply.

Taxes are convoluted at best, so feel free to gather more information on these various GST and rebate rules at http://www.fin.gov.bc.ca/rev.htm

Filed in: Buying and Selling Real Estate

About the Author (Author Profile)

Andrew is a West Coast enthusiast through and through. He is a native of the area that you will often find adventuring on one of the many sea to sky activities that abound in the Fraser Valley. Along with being in love with the place he calls home, Andrew is a well known and respected Realtor focusing on helping others to find their own perfect home in Langley, Surrey, White Rock and beyond! Visit www.yourperfecthomebc.ca to find your perfect home.

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