The BC Provincial government showed a card from it's hand today when they announced they will up the HST threshold on new homes from $400,000 to $525,000 today. This effectively lessons the tax burden 30% on purchaser of new homes. The tax credit jumps from $20,000 to $26,250.
While the added tax relief is welcome it still falls short of what many lobby groups were demanding. There are only two areas in the GVRD where the median sale price of a home is under the $525,000 threshold (Maple Ridge at $477,000 and Port Coquitlam at $507,500) while all the other areas come in significantly higher than the threshold. Vancouver West has a median price of $1.5 million putting an extra tax burden of $68,250 on the purchaser.
Click on the above image to see the PDF
The new threshold also doesn't account for the extra tax owing on other services involved in the transaction of a new home such as Realtor, legal, banking and moving costs which will all be subject to the new tax. All told the housing industry, which already supplies the government coffers with large chunk of the federal budget through the current tax regime, will now be burdened with a significantly uneven share of the HST windfall.
Click HERE to see the article in the Vancouver Sun
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