BC HST: How it applies to homes

On July 1, 2010 HST - a combination of the 7% Provincial Sales Tax (“PST”) and the 5% federal Goods and Services Tax (“GST”) - will become effective. If you are thinking of buying or selling a home in British Columbia you are certainly concerned about the HST. Here is some basic information about how HST will apply to new and resale homes in British Columbia.

HST on resale homes:

There is no HST on resale (pre-owned) homes. You can expect to pay HST on items such as home inspections, appraisals and Realtor fees and other such services.

HST on new homes:

HST will be payable on the sale of all new or substantially renovated homes, where the Contract of Purchase and Sale was entered into after November 18, 2009 and both ownership and possession of the home is transferred after June, 2010.

If you signed the Contract of Purchase and Sale prior to November 18, 2009 or if the ownership or possession of the home is transferred before July 1st, 2010 no HST is payable.

And oh yea, there is that rebate too:

The Rebate is 71.43% of the provincial component (remember GST + PST = HST) of the HST paid, up to a maximum of $26,250.00.

*** And if you have listed and sold property in the transition period, you have to calculate how much work was perfomed before and after July 2010 to calculate HST on Realtor fees.

Here is some information in official language.

Click here to visit HST page on BC Govt website.