1 In the current 5% GST system, new homebuyers in Vancouver and British Columbia may be eligible for a one-time federal GST Rebate. The rebate is called the GST new housing rebate and can be completed by the homeowner themselves or by their legal team. The GST new housing rebate is equal to 36% (thirty six per cent) of the total 5% GST paid on the first $350,000 (three hundred and fifty thousand dollars) of the purchase price of a new Vancouver or BC home. For new homes between $350,000 to $400,000 (before property transfer taxes, GST and other closing costs), the amount of the federal GST new housing rebate phases until until it reaches zero at $450,000.
2 In the new 12% HST system, BC homebuyers of new homes and condos will still receive the same federal GST new housing rebate (as explained above) which is phased out when the purchase price of a new home hits $525,000. However, for new Vancouver and BC home buyers, they get an added HST rebate on the British Columbia portion of the Harmonized Sales Tax of 5% (five per cent). In other words, there is a proposed HST rebate of 5% on the 12% HST tax for homes valued under $525,000 only. For new homes costing more than $525,000, the maximum partical BC HST rebate is $26,250.
What Do The New Home BC HST Tax Increase Mean? How Much Is the BC HST Price Difference
on New Homes in Vancouver?
As you run through the numbers in our BC HST Chart, you will see the differences between the Total Purchase Price in the Old System (5% GST) and the New System (12% HST). In the far right most column, we have calculated the New Home Cost Increase. The new home BC HST tax increase is quite profound when you consider that home ownership and real estate markets in British Columbia are among the highest in Canada already. With affordability a key topic for all residents in this province, the new home BC HST tax increase may mean that many more people will be priced out of the property markets, and forced to rent for a lot longer than anticipated. The BC HST price difference is also very significant. When considering some simple numbers such as the purchase price of a $100,000 new condo in BC, the BC HST price difference is $2,140, which is essentially a bit more than 2% more than the old system. When you work your way up to the $500,000 house, the new home BC HST tax increase stands at roughly $15,140, or 3% more, even after the HST rebate. When you’re talking about a $1 million home, the BC HST price difference is a whopping $50,140, which represents a 5% increase in total purchase price of a new home in Vancouver or BC. And the numbers get uglier as the purchase costs go up.