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.

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