The tax on new construction priced less than rebate threshold of $525,000 will be no greater after July 1 than it is today
Peter Simpson
Sun
The excitement is building. There are only five more sleeps until HST becomes a reality in B.C.
Facetiousness aside, and despite the relentless protests against the harmonization of the federal and provincial sales taxes in this province, get ready to dig a little deeper into your pockets on July 1.
Great way to celebrate Canada Day and the start of the summer vacation season, huh?
Regarding new homes, there are some misconceptions about the new tax. First off, the HST, like the GST, will not apply to existing homes. Second, if the new home is priced below the rebate threshold of $525,000, buyers will pay no more tax after July 1 than they currently pay under GST.
And although it might be obvious that five per cent GST and seven per cent PST equal 12 per cent, buyers of new homes priced above $525,000 will not pay the full 12 per cent for their homes because various rebates and tax credits apply. But make no mistake, some homebuyers are still going to feel the sting.
Rather than delve, in this column, into the technicalities of the HST application and rules, I suggest you ask your builder or realtor to fully explain how the new tax will impact your specific transaction.
There is also a lot of useful information posted on the Internet by various government and industry organizations, including the Canada Revenue Agency, the B.C. government, Canadian Home Builders’ Association of B.C. and real estate boards throughout the province.
If a new home is in your future, there are many condos, town houses and single-detached offerings from which to choose -and priced low enough that you won’t have to fret about the dreaded HST. Take your time looking and choose a home that matches both your budget and the needs of your family.
Meanwhile, the Greater Vancouver Home Builders’ Association and its members intend to step up efforts to try to persuade governments at all levels to eliminate or mitigate the impediments to affordable home ownership. Government-imposed costs combine to total more than 20 per cent of the price of a new home in many regions, including Metro Vancouver. That needs to be examined.
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Peter Simpson is the president and chief executive officer of the Greater Vancouver Home Builders’ Association. E-mail: [email protected]
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