The provincial government has announced the end of the HST and introduced transitional tax changes designed to help the province’s real estate and home construction industries in the meantime.
BC will raise its new-housing HST rebate threshold to $850,000 from the current $525,000 to help offset the cost of the HST, until it is scrapped on April 1, 2013.
The province will also introduce a rebate for new recreational homes built outside of greater Vancouver and Victoria, to stimulate that portion of the real estate market until the HST is gone.
These transitional rules for the new-home market are designed to provide certainty and fairness until the tax is canceled, said Finance Minister Kevin Falcon.
“The home building industry has been looking for clarity and certainty and that’s exactly what we’re delivering today,” said Falcon on Friday.
Falcon said that winding down the HST on April 1, 2013 is “the fastest date we can get there responsibly” and the transitional rules for new housing will assist a market hit particularly hard by the tax.
Starting on April 1 this year, the government will provide a partial HST rebate on new homes priced at up to $850,000. The maximum rebate of $42,500 will apply to more than 90-per-cent of new homes, and will mean new home prices will be roughly the same under HST or PST. HST does not apply on re-sale homes.
For secondary and vacation homes outside of greater Victoria and Vancouver, which had been subject to full HST on the entire purchase price, the government will bring in same $850,000 rebate threshold.
The government also announced that for homes which started construction before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven-per-cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two-per-cent on the full home price
Excerpted from the Vancouver Province
