Government announces the transition rules for the HST early

HST Threshold being raised to $850,000 effective April 1, 2012

Government announces the transition rules for the HST early

The Honourable Kevin Falcon, Minister of Finance, held a press conference today in Victoria to announce transition rules for the harmonized sales tax and the affect it will have on the home building industry. Effective April 1, 2012, the threshold for new housing rebates will be increased from $525,000 to $850,000. Furthermore, this rebate will not be available for secondary homes (outside the Metro Vancouver and Capital Regional District).

For full information check out the government site below:

 http://www.newsroom.gov.bc.ca/2012/02/transition-measures-support-new-home-buyers-builders.html

Some of the key elements include:

- The B.C. new housing rebate threshold will be increased to $850,000, effective April 1, 2012 with a maximum rebate of $42,500.

- A provincial grant of up to $ 42,500 will be available for purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000, effective April 1, 2012.

- For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price.

- The temporary housing transition measures will be in place for two years, until March 31, 2015. The tax only applies to homes where construction begins before the transition date and ownership and possession occur after.

The BC Ministry of Finance has updated their PST in BC website: http://www.pstinbc.ca/buying_goods/buying_a_home

The Canadian Ministry of Finance has also released its transitional rules, with examples related to the sale of real property. The rules note:

- In the case of a sale of real property, tax generally becomes payable on the earlier of the day on which ownership is transferred to the recipient and the day on which possession of the property is transferred to the recipient under the agreement of purchase and sale. However, where the property supplied is a residential condominium unit in a condominium complex which has not, at the time possession is transferred, been registered as a condominium, tax is not payable until ownership of the unit is transferred or, if earlier, 60 days following the date of registration.

There are several examples listed in the rules, which can be found here: http://www.fin.gc.ca/n12/data/12-017_1-eng.asp

From the Victoria Real Estate Board February 17, 2012

Rosie Siegel

Rosie Siegel

REALTORĀ®
CENTURY 21 Queenswood Realty Ltd.
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