B.C. announces HST transitional rules on new homes
February 17, 2012
Today BC Minister of Finance Kevin Falcon released HST transition rules and tax relief measures for the homebuilding industry and its customers.
Tax relief measures include:
- Effective April 1, 2012, the HST rebate threshold on new homes increases to $850,000 from $525,000. The maximum rebate rises to $42,500 from $26,250.
- Measures are also in place for the secondary/recreational home industry outside of the Greater Vancouver and Capital Regional Districts, where the HST rebate threshold rises to $850,000 from $0, also effective April 1, 2012.
PST implementation will be effective April 1, 2013. The transition rules from HST to PST for newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.
Home renovation will fall under regular transition rules to take effect April 1, 2013.
The governments intent is to ensure “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.
This has provided some clarity and certainty to consumers and should help to neutralize the impact of the HST a year before it reverts to the PST system.
Overall this should help to stimulate the new homes market throughout the province.
For more information, go to www.pstinbc.ca and click on New Housing Rules.
The British Columbia provincial government also announced two incentives for the residential construction industry and its consumers:
B.C. First-Time New Home Buyers Bonus
The new B.C. First-Time New Home Buyers Bonus will be a temporary, one-time refundable income tax credit for first-time home buyers who purchase a newly constructed home. The credit will be calculated as five per cent of the purchase price of the home, up to a maximum credit of $10,000.
The credit will be phased out at a rate of 20 per cent of net income in excess of $150,000 for single individuals and at a rate of 10 per cent of family net income in excess of $150,000 for couples. Only one credit can be claimed per home.
The credit will be available on purchases of newly constructed housing where both the HST applies and where a written agreement of purchase and sale is entered-into on or after
Details are available here www.bcbudget.gov.bc.ca>HERE
B.C. Seniors Home Renovation Tax Credit
The B.C. Seniors Home Renovation Tax Credit will be a new refundable personal income tax credit to assist with the cost of permanent home renovations that provide individuals age 65 and over with increased independence, allowing them the flexibility to remain in their own homes longer.
The maximum credit will be $1,000 annually, calculated as 10 per cent of eligible expenditures. The credit will be available to individuals who incur eligible expenditures on or after April 1, 2012. The credit can be claimed by seniors, whether they own their home or rent, and by individuals who share a home with a senior relative.
For more information, go to www.bcbudget.gov.bc.ca