Buying a Home: The Impact of the HST

 

Once in place, the HST will apply where the GST currently applies.  In addition to being payable on the purchase price of a new or substantially renovated home, HST will be payable on expenses such as real estate commissions, appraisal fees, and other services required in the course of a home purchase. As a result, all homebuyers, new and used, will likely pay more to purchase their house after July 1, 2010 then they would have if they had done so prior to July 1, 2010.  

 

While the purchase of a used home will be exempt from HST, purchasers of new or substantially renovated homes after July 1, 2010 will be required to pay HST. There will, however, be rebates in place so that purchasers of new homes under $400,000 will not be required to pay significantly more than they would prior to July 1, 2010.  For homes priced between $400,000 and $450,000, there will be a partial rebate to reduce the impact of the HST on the purchaser.  Once the purchase price of a new home passes $450,000, the maximum rebate of 5% of the purchase price up to $20,000 will apply. 

 

Are you wondering what will happen where a contract of purchase and sale is entered into prior to July 1, 2010 with the sale closing after July 1, 2010?  Watch for a future Legal Alert article with respect to the transitional provisions once they become available.

 

If you have any questions about how the HST may impact your future home purchase, or any other real estate questions, please contact Una Gabie at gabie@pushormitchell.com or (250)869-1230.  Una’s practice includes residential and commercial real estate including purchases, sales and refinancing.