Ok - so you want to buy property in BC. What is it going to cost?
When I moved from Alberta to BC in 2001, we bought a beautiful piece of waterfront property. We were so excited to make this move and create a lifestyle we'd always wanted but were in for an unwelcomed surprise.
It was not until we were in front of the lawyer, signing the Statement of Adjustments did we learn what it would cost us to buy property in BC. The Property Transfer tax, applicable to all real estate transactions in BC (with few exceptions) was going to cost us 1% on the first $200,000 of the purchase price and 2% on the balance. We had to come up with extra cash and needless to say we were not happy about not having learned about it from our REALTOR®.
Today, in addition to the Property Transfer Tax (all you Albertan's can think of it as a Sunshine Tax!), we now have HST, applicable in different ways on a real estate transaction.
If you are purchasing a NEW property in BC, then the 12% HST is applicable to the purchase price, just as GST was. If it is your principle residence, then you qualify for a rebate. It's convoluted and I'm not sure even CRA knows how this is going to work as it's changed a few times. To learn the latest on the rebates, here is a link to the CRA publication GST/HST New Housing Rebate.
If it is not going to be your principle residence, such as in the case of purchasing a recreational property, there is no rebate currently in place.
If you are a seller in BC, HST applies to the service being provided by your REALTOR®. Where GST was charged on the real estate commission, HST now applies to those same services.
HST is not applicable to the sale price of a pre-owned home. In some cases however, some recreational property owners who rented out their property applied for a GST number in order to claim it back the tax when they purchased it new. Today, upon the sale of that property, regardless of when it was built and that it's been occupied, HST will apply since the tax has never been paid on it.
Hope this clarifies for you how the HST works on the purchase of real estate in BC!
*This article was written by Paige Gregson and is believed to be accurate. However, professional advice from an accountant and or lawyer should be sought when purchasing a property where HST may be applicable.