Mortgage Tips by Jerry Sims
HST and HST Rebates
Just thought I would pass along some (hopefully) useful information that I just received from one of the law firms that I deal with. The material deals with the HST and HST rebates relating to the purchase of new housing.
The government of B.C. implemented the HST on July 1, 2010. The HST consists of the combination of the 7% PST and the 5% GST. This combined tax is called the HST.
The HST applies to all purchases of newly built residential homes and substantially renovated homes. Used (i.e. resale) residential homes are not subject to HST.
There are potentially 3 rebates available to purchasers of new housing.
The GST New Housing Rebate or the GST New Residential Rental Rebate will refund up to 36% of the 5% GST. A full rebate is available for homes up to $350,000. Between $350,000 to $450,000 is a gradual pro-rated reduction of the rebate. Homes above $450,000 do not qualify for any rebate of the GST.
The second rebate is the BC HST Rebate. This rebate is 5% of the purchase price up to a maximum rebate amount of $26,250. Any home with a purchase price of over $525,000 will have a maximum BC HST Rebate of $26,250.
The third potential rebate is the BC PST Transitional Rebate. This rebate is to adjust for PST that was embedded in the construction of new homes before June 30, 2010. This rebate only applies to new single family/detached houses and does not apply to the purchase of new strata housing.
The BC PST Transitional Rebate will refund up to 2% of the purchase price of a new house depending on the level of completion as of July 1,2010.
Important Note About Rebates
The above description regarding the rebates is for informative purposes only. Please contact a lawyer or notary to calculate any potential rebates once you have a firm and binding contract.
Please do not assume that the above rebates are automatically adjusted for. The developer must explicitly set out in the contract that they will adjust for any rebates on the statement of adjustments upon completion. If there is no such clause, then the buyer will need to submit the rebate application themselves and wait to receive the rebate much later in the mail. This can cause problems for buyers who are relying on the rebate adjustment to complete the purchase.
Jerry Sims, AMP
Ambro & Associates Mortgage Consultants Ltd.