In response to strong lobbying efforts by consumers and industry groups such as organized real estate, the BC government introduced new measures in the Harmonized Sales Tax (HST) transitional rules on housing. The changes were announced on November 19.

Buyers of new homes priced at up to $525,000 will be eligible for a partial rebate of 71.43 per cent on the provincial portion of the HST, up to a maximum rebate of $26,250. Those buying new homes priced at over $525,000 will be eligible for a flat rebate of $26,250. The new measures represent a 30 per cent increase to the previously announced BC HST new housing rebate threshold of $400,000 and maximum rebate of $20,000.

This is encouraging news for home buyers as BC has some of the most expensive and heavily taxed real estate in Canada.  REALTORS® have been sharing their concerns about the impact of the HST on housing affordability with the government since the tax was introduced in July.

Government Relations committee chair Christine Caldwell says, "This announcement is rewarding because we have been active at ensuring the government is aware of the profession’s concerns about the HST. We encouraged members to participate in BCREA’s letter writing campaign and voiced our concerns to Finance Minister Colin Hansen during Abbotsford Chamber of Commerce and Surrey Board of Trade meetings about budget issues."

During the provincial pre-budget consultation process, Christine joined BCREA in making a presentation to the BC government, which included recommendations on the HST.

When our Government Relations volunteers head to Victoria in the spring for BCREA’s Government Liaison Days conference, they’ll be delivering a message to MLAs that the BC government needs to continue to find ways to reduce the heavy tax burden on housing.

Here are some highlights on the HST transitional rules for housing:

• Generally, builders’ sales of newly-constructed or substantially renovated homes would be subject to the provincial portion of the HST, if both ownership and possession of the home are transferred after June 2010. Grandparenting will be provided for certain contracts.
• The proposed transitional rules for new housing, including builder reporting and disclosure requirements, would be administered by the Canada Revenue Agency (CRA).
• Generally, sales of new homes under written agreements of purchase and sale entered into on or before November 18, 2009, would be grandparented, such that these sales would not be subject to the provincial component of the HST and would not be eligible for BC’s housing rebates.
• Grandparenting would be offered for newly-constructed or substantially-renovated single unit homes, including detached homes, semi-detached homes, and attached homes.
• Grandparenting would not apply to traditional apartment buildings, mobile homes (including modular homes) and floating homes, as the general transitional rules would apply differently to those homes. However, these homes may qualify for BC housing rebates.

For more details on the new residential housing rebates and the transitional rules for BC’s HST, check out a Ministry of Finance’s Tax Information Notice available here:
www.sbr.gov.bc.ca/documents_library/shared_documents/HST/new-housing-rebates.pdf.

Warmest Regards,

Andrew Szalontai - It's all about service
Langley BC Real Estate   -   778.862.5542
andrew@YourPerfectHome.ca
Remax Treeland Realty