- B.C.'s portion of the HST will continue to apply before April 1, 2013. Purchasers will be eligible for the new higher B.C. HST new housing rebate, of up to $42,500, and builders will continue to claim input tax credits.
- B.C.'s portion of the HST will no longer apply to newly built homes where construction begins on or after April 1, 2013. Builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home's final price will again be embedded PST.
- For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price. This ensures equitable treatment among purchasers and will help mitigate distortive market behaviour. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double-taxation on homebuyers.
- Raising the B.C. HST rebate threshold to $850,000 is expected to save purchasers about $60 million in 2012-13. The maximum value rises to $42,500 from $26,250, a 60 per cent increase.
- More than 90 per cent of newly built homes sold in B.C. are below the new higher rebate threshold.
- Average amount of embedded sales tax in newly built homes under PST: two per cent.
- Tax paid by purchasers on an $850,000-newly built home after HST rebate: two per cent.
- Tax rate on a newly built home during transition: two per cent.
- The temporary housing transition measures will be in place for two years, until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.
- The temporary housing transition tax and the temporary housing transition rebates will be administered by the Canada Revenue Agency on behalf of B.C. The Province is administering the grant for new secondary vacation and recreational homes.
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