Temporary housing transition rebate, effective December 1, 2012.

December 20, 2012 | By

On February 17th, 2012 the Government announced the new housing transitional rules for returning to the PST. The transition rules provide certainty for new-home construction and sales, particularly during the transition period.

As such, here are a few points to know and understand:

  • B.C.’s portion of the HST will no longer apply to newly built homes where ownership and possession transfer on or after April 1, 2013.
  • While PST will not apply to the purchase of new homes, builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home’s purchase price will again be embedded PST.
  • The temporary housing transition measures will be in place for two years, until March 31, 2015.
  • A new temporary housing transition tax of two per cent will generally apply to purchasers of new homes where at least 10 per cent of construction has begun before April 1, 2013, and ownership and possession transfer on or after that date.

The temporary housing transition tax and the temporary housing transition rebate for builders will be administered by the Canada Revenue Agency on behalf of B.C.

The act covers the temporary housing transition tax, and the temporary housing transition rebate comes into effect on December 1, 2012.

Under a newly passed regulation, builders are required to provide specific tax-related information to purchasers to ensure a shared understanding of the taxes and rebates that are included in the contracted purchase price, and that apply under the transition rules. Builders who fail to disclose the required information may incur a penalty.

The “Coles Notes”?

  • Average amount of embedded sales tax in newly built homes under PST: two per cent.
  • Provincial portion of the HST paid by purchasers on an $850,000-newly built home after HST rebate: two per cent.
  • Temporary provincial transition tax rate on a newly built home during transition: two per cent.
  • The B.C. new housing rebate threshold has been increased to $850,000, meaning more than 90 per cent of newly built homes may now be eligible for a provincial HST rebate of up to $42,500.

It is important to note that the HST does not apply to resale housing, but raising the B.C. HST rebate threshold to $850,000 is expected to save purchasers about $60 million in 2012-13.

A lot of information to take in, but your real estate agent should be able to break the details down further for you as they pertain to your purchase. As always …bitter sweet information from the government!

*Source: http://www.hstinbc.ca/buying_goods/buying_a_home/new_home_purchases

 

 

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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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