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Wednesday, July 14, 2010

Harmonized Sales Tax - HST & its Effects on BC Real Estate

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Harmonized Sales Tax—HST

 

  
July 1st, 2010   The HST at 12%, composed of a federal part at 5% and a provincial part at 7%, would apply to a builder's sale of a newly constructed or substantially renovated residential complex, including a multiple unit residential complex (e.g., an apartment building). The sale of housing that has been previously occupied by an individual as a place of residence and that is exempt from GST would also be exempt for purposes of the HST. The definitions in the Excise Tax Act that relate to housing (e.g., builder, residential complex, residential unit, residential condominium unit, substantial renovation) and the CRA's current policies regarding the application of the GST to housing, would generally apply. under the HST.
 
HST Rebates
Price:        HST 12%     Provincial HST    Property          1st Time                  GST
                                      Rebate  (5%)   Transfer Tax   Buyers Exempt      Rebate                          

$250,000     $30,000       (12,500)             $3,000             ($3,000)            ($4,500)     

$350,000     $42,000       (17,500)             $5,000             ($5,000)            ($6,300)     

$525,000     $63,000       (26,250)             $8,500             N/A                     N/A
$750,000     $90,000      (26,500)             $13,000          N/A                       N/A                                                                          $1,000.000  $120,000     (26,250)              $18,000           N/A                    N/A        
  
Notes:                              5% up to           1% on 1st      exemption to     36% of the 

                                         $525,000          $200,000,     $425,000           5 % of HST

                                         than fixed at      2% on          than phases      up to $350,000
                                         $26,250 after.   remainder.    out.                   declines to zero
                                                                                                                 after $450,000.
  
Therefore: 
 
 
                         Total Tax if                  Total Tax if Not
 Price:           1st Time Buyer            1st Time Buyer
 
$250,000             $13,000                            $16,000
$350,000             $18,200                            $23,200
$525,000             $45,250                            $45,250
$750,000             $76,750                            $76,750
$1,000,000          $111,750                          $111,750
  
  
Disclaimer:  For more in depth analysis of the HST and applicable rebates, please speak to your Real Estate Lawyer. 

 

  
  
  

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