PROVINCE INCREASES NEW HOUSING REBATE THRESHOLD
VICTORIA – The Province is proposing to increase the threshold for the B.C. HST new housing
rebate from $400,000 to $525,000 to ensure that, on average, purchasers of new homes up to
$525,000 pay no more tax due to harmonization, Finance Minister Colin Hansen announced
today.
“We heard the concerns from consumers and industry about how the HST might affect
home buyers, and this increase will move the threshold to above the average new home price in
the province. At $26,250, this provides the highest maximum provincial rebate in Canada,” said
Hansen. “A similar rebate will also support the construction or substantial renovation of
affordable rental housing.”
Purchasers of new homes would be eligible for a rebate of 71.43 per cent of the
provincial portion of the HST paid on a new home, up to a maximum of $26,250. Homes above
$525,000 would receive a flat rebate of $26,250. This enhanced rebate represents a 30 per cent
increase in the threshold and maximum rebate available.
The Province is also proposing transitional rules for new housing. The provincial portion
of the HST would not apply to sales of new homes where ownership or possession is transferred
before July 1, 2010. In addition, sales of new homes under written agreements of purchase and
sale entered into on or before Nov. 18, 2009, would generally not be subject to the provincial
portion of the HST, even if both ownership and possession are transferred on or after July 1,
2010.
On July 1, 2010, British Columbia intends to adopt the HST, combining a seven per cent
B.C. rate with the five per cent federal Goods and Services Tax. At 12 per cent, B.C. would have
the lowest HST rate in Canada. It is estimated the HST would remove over $2 billion in costs for
B.C. businesses, including an estimated $1.9 billion of sales tax removed from business inputs
and an estimated $150 million annually in compliance costs.