HST TO PST – TRANSITION RULES FOR REAL ESTATE PROPERTY
WHEN DOES HST APPLY, AND WHEN DOES GST APPLY?
HST applies if tax becomes payable before April 1, 2013. GST applies where tax becomes payable after March 31, 2013. In addition, the BC transition tax may then apply where construction or substantial renovation is at least 10% complete on April 1, 2013.
WHEN DOES THE TAX BECOME PAYABLE?
Except for the sale of certain residential strata units, the tax is payable on the earlier of the following dates:
• when the seller transfers ownership (also known as the completion date) of the new home to the buyer, or
• when the seller transfers possession of the new home to the buyer under the Contract of Purchase and Sale.
WHEN DOES THE TAX BECOME PAYABLE WHEN THE TRANSACTION INVOLVES A STRATA UNIT?
The general tax payable rule will apply for strata’s except where the strata plan hasn’t been registered as a condominium by the date possession is transferred. The tax payable is then based on the earlier of the following dates:
• when the seller transfers ownership (also known as the completion date), OR
• 60 days following the date the strata plan is registered.
TAX Transition Time
Farewell HST … Welcome Back GST/PST
The BC government imposed it in 2010, voters rejected it in 2011 and in a matter of two short weeks or so the HST will go down into the history books of BC politics as one of the most controversial, if not contentious, taxes in history. Effective April 1st, the Harmonized Sales Tax will be eliminated and a period of transition will commence with some significant changes in store for our industry, your buyers, your sellers and you as a REALTOR®. Here’s a snapshot of what to look out for leading up to April 1, 2013 and after:
OUT WITH THE OLD, IN WITH THE NEW
The 2 per cent BC Transition Tax makes its debut April 1, 2013. It’s a tax, albeit a temporary one, your new home buyers need to know about:
REBATES & INCENTIVES
With the demise of the HST comes the end of the New Housing Rebate program and the commencement of new incentives your new home buyers will want to know as being effective April 1st :
Where your buyer is purchasing a new home as a principal residence, be clear on the Contract of Purchase and Sale to specify whether the buyer will assign the GST rebate to the builder, be credited the rebate at closing or be themselves responsible for paying the GST on closing and apply to the government for the rebate. Your buyer can expect to wait about three months for a rebate to be processed and mailed.