HST Update - New Thresholds and Transitional Rules

On November 19, 2009, updates to the application of the HST to new and substantially renovated housing were released by the Ministry of Finance.  As most people are now aware, the HST will apply as of July 1, 2010 to the purchase of new or substantially renovated homes.

One change that will be welcomed by purchasers is the increase to the threshold for the new housing rebate from $400,000 to $525,000.  Purchasers will receive a rebate of 71.43% of the Provincial portion of the HST up to a maximum of $26,250.  For houses with a purchase price above $525,000, a flat rebate of $26,250 will be available.  Similar rebates will also be available for the construction or substantial renovation of affordable rental housing in British Columbia.

Transitional rules were also released on November 19, 2009.  Under the rules, the Provincial portion of the HST will generally not apply to a purchase of a home where ownership and possession are transferred on or after July 1, 2010 provided that the agreement of purchase and sale was entered into on or before November 18, 2009. There are some exceptions to this including mobile homes as the general transitional rules will apply.

For more information on how the HST may affect your real estate dealings, please contact Brad Cronquist at cronquist@pushormitchell.com or Una Gabie at gabie@pushormitchell.com