HST to PST: Transition Rules for Real Property

Tuesday, December 18th, 2012


On August 26, 2011, the provincial government announced that it will eliminate the Harmonized Sales Tax (HST) by March 31, 2013. Commencing April 1, 2013, in BC the HST will be replaced by the federal Goods and Services Tax (GST) and the BC Provincial Sales Tax (PST). On February 17, 2012, the BC Ministry of Finance and the federal Ministry of Finance announced general transition rules for real property.

The following questions and answers are intended to provide clarity regarding sales of new housing at a high level. For advice about specific transactions and situations, BCREA suggests individuals seek legal and/or accounting advice, as appropriate.

For more information, see:

Frequently Asked Questions – PST Transition Rules

1.     Why are transition rules necessary?

2.     When does HST apply, and when does GST apply?

3.     Generally, when does the tax become payable?

4.     Generally, when does the tax become payable when the transaction involves a strata unit?

5.     Who will be responsible for paying the GST?

6.     Will the PST apply to real property?

7.     How will the temporary transition tax work?

8.     Who pays the temporary transition tax?

9.     How will the temporary transition tax work when the transaction involves a strata unit?

10.                        Are there any rebates for sellers related to the temporary transition tax?

11.                        How will the transition affect the way I prepare or counter a standard form Contract of Purchase and Sale?

12.                        If a Contract of Purchase and Sale for a new home was signed on or after February 17, 2012 and before December 1, 2012, and included an addendum containing required information, is any further action needed?

13.                        What methods can be used to provide the buyer with the addendum?

14.                        Is there a penalty for builders who don’t make the required disclosures during the transition period?

15.                        Will the PST apply to real estate commissions?

16.                        When does commission become payable?

17.                        Are there any special rules for commercial property?


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