Legal Flash - November 2009

HST is coming and, as of yet, we still don’t have a full break down of what we can expect.  So far the government has been somewhat aloof with respect to filling us in.  Some speculate that they are still putting it all together.  Many interest groups are currently lobbying the government to allow for exceptions to the Harmonized sales tax or to exempt their products all together.  The British Columbia Real estate Association (BCREA) is no exception.  To date nothing has been officially set in stone but there is no doubt that regardless of what the final draft looks like we are all going to be paying more for our current standard of living.

Here is a list provided by, Lower Mainland  Real Estate lawyer, Laura Holland of what we do know so far:

-The Harmonized Sales Tax is a 12% tax applicable to most goods and services, including new homes.

-The 12% HST  is a combination of the Federal GST (5%) and the provincial PST (7%).

-Effective date:  July 1, 2010.

-The HST is not ONLY a 12% real estate tax, but a general tax on most goods and services, including new homes.

-Currently, new homes are subject to 5% GST; there are rebates for homeowners and investors in some circumstances.

-There will be a partial rebate in HST for homes up to $525,000.  This should make the GST payable on homes under $525,000 equivalent to today’s rates.

-Over $525,000, the maximum rebate will be $26,250.

-HST will affect other costs for home buying for purchasers and sellers including the cost of real estate commissions and legal fees.

-The details of the rules and phasing in the tax have not been released in relation to new homes.


After HST is implemented

 Purchase price = $600,000

HST = 12% x $600,000 = $72,000

Discount on new housing =  maximum $20,000

Total HST payable = $52,000


Before HST (Current GST regime)

Purchase price = $600,000

GST = 5% x $600,000 = $30,000

The difference = $22,000

Note: This information is provided based on the must current information available at the time of the printing.  Please don’t hesitate to contact the Holland Law Group for updates as the government rolls out this program at 604 421 6111.


Tune in to hear Laura Holland’s weekly legal bulletins on Talk 1410 - Radio Real Estate! (Saturday from 11 to 12).


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