Steve Baldwin

REALTOR®

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How will the HST impact the Real Estate sector?

 
As proposed, the HST will increase the cost of buying or selling all types of property and becomes essentially an additional tax on home ownership. REALTOR® commissions, appraisals and other services will be subject to a 12% HST, replacing the 5% GST now charged, and new homes will be subject to the full HST.

The HST would generally apply to a supply of a service to the extent that the service is performed on or after July 1, 2010. The HST would generally not apply, however, to a supply of a service if all or substantially all (90% or more) of the service is performed before July 2010.

 
How will the proposed rebate for new and substantially renovated existing homes work?
 

Proposed to Take Effect on July 1, 2010

Tax: 12 per cent HST

New Home Price Level

Rebate

Up to $350,000

Partial Rebate on Federal Portion of HST (GST)

71.43% Rebate on Provincial Portion of HST

Government expects total impact to be equivalent to existing tax system before July 1, 2010

$350,000 t0 $450,000

Rebate on Federal Portion of HST (GST) clawed back (straight-line method)

71.43% Rebate on Provincial Portion of HST

Government expects total impact to be equivalent to existing tax system before July 1, 2010

$450,000 to $525,000

71.43% Rebate on Provincial Portion of HST

Government expects total impact to be equivalent to existing tax system before July 1, 2010

Over $525,000

$26,250 Fixed Rebate on Provincial Portion of HST

 

Existing System Before July 1, 2010

Tax: 5 per cent GST

New Home Price Level

Rebate

Up to $350,000

Partial Rebate on Federal Portion of HST (GST)

$350,000 to $450,000

Partial Rebate on Federal Portion of HST (GST) gradually eliminated

Over $450,000

No Rebate

 
How will the HST work with the Property Transfer Tax?
 
In the case of new housing, where GST applies, the GST is not included for the purposes of determining the fair market value of the property. Similarly, the HST would not be included in the fair market value of the property for the purposes of determining the PTT payable. (Source: BC Government website, www.gov.bc.ca/hst/faq.html, accessed July 28, 2009)

This additional layer of taxation enhances the already heavy burden carried by BC homebuyers. Therefore, BCREA is focused on achieving fairness for consumers.

 
For more information or FAQ’s please visit: http://www.bcrea.bc.ca/hst/hstaction.htm

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