HST On BC Real Estate - How much Will It Cost You?
The answer depends on if you are looking at NEW HOMES or re-sale homes.
With the HST implementation date quickly approaching, many of you have asked what effect this new value-added tax will have on real estate prices in BC. To answer this question, we must break down its effects into 2 categories: New Construction and Resale.
New Construction
This category is the one that is likely to be most influenced by the change from GST to HST. All new residential construction will now be taxable at the 12% rate rather than the previous 5%. To offset some of this, the government has introduced a New Housing Rebate which will significantly reduce the burden of the additional tax up to a house value of $525,000. For new construction valued at over $525,000, the purchaser will receive a flat rebate of $26,250, meaning the increased burden of this tax will only affect those purchasing a new home over $525,000.
But that's not the end of the story. The changeover from the GST & PST to the HST should result in significant real savings to the construction industry as they can now receive government rebates on their inputs. These cost savings will, through time, result in lower overall construction costs, which should help mitigate some of the additional tax burden for those buying new construction valued at over $525,000.
In fact, for those buying property valued at less than $525,000, the overall cost may eventually be lower than before the HST is implemented.
Morgan Rice
Squamsih Real Estate - REALTOR (R)
604-849-2668
mrice@macrealty.com
HST British Columbia Real Estate
Squamish Real Estate
Vancouver Real Estate
Lower Mainland Real Estate
