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Government announces new HST/PST Transitional Rules

Government announces new HST/PST Transitional Rules

In BC, REALTORS® have help create our future.

Since the HST on new homes was announced in 2010, BCREA, I, along with Boards and REALTORS® have advocated for:

  • an increase in the threshold value of homes to be covered by the rebate;
  • an increase in the rebate amount; and
  • an announcement of the transition rules for new homes as early as possible.

On February 17, 2011, the BC government proved it was listening to us by announcing new HST/PST housing transitional rules. Let’s give ourselves a big pat on our backs! Congratulations.

The PST will replace the HST effective April 1, 2013, and in the meantime new transition rules include:

  • The BC New Housing Rebate threshold will increase to $850,000 from $525,000 on April 1, 2012.
  • The maximum rebate will increase to $42,500 from $26,250 effective April 1, 2012
  • Buyers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts priced up to $850,000 will be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.
  • For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.

These rules ensure home buyers pay a consistent, equitable amount of tax, whether the home is built:

  • entirely under the HST;
  • entirely under the PST; or
  • partly under HST and partly under the PST.

These rules will be in place until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.

For information:

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