Market Talk

July 12, 2010

The Harmonized Sales Tax

 How it works

Implementation of the BC Harmonized Sales Tax will took place on July 1, 2010.

The Provincial Sales Tax 7% was eliminated. The 7% B.C. rate has joined the 5% Goods and Services Tax to give us a total Harmonized Sales Tax rate of 12%. Before July first where p.st and g.s.t were calculated it was also 12%.

Who it will affect

A good guideline to go with is if you didn’t pay GST on an item before, you won’t pay HST on it now. These are things like:

• basic groceries
• most health, medical and dental services
• visiting the doctor or dentist
• certain medical devices (hearing aids; prescription eyewear; canes, wheelchairs, walkers)
• prescription drugs
• legal aid services
• most financial services
• many educational services
• insurance premiums
• resale housing

HST will not affect a a home purchase where the house is not new no matter the cost.

However, The BC HST of 12% HST is applicable to any costs and fees associated with your home purchase like legal/notary fees, realtor commissions(if you are selling) and other closing costs.

HST is applicable to pre-sales(homes purchased before completion of construction), New homes, and lots (properties without a livable home on them.

Rebates

The B.C. HST program will give partial rebates for new BC homes priced up to $400,000. The government will give these homebuyers a partial five per cent BC HST rebate on the provincial tax side which makes any new B.C. home or Vancouver property $400,000 or less no more expensive than it is today. 

Homebuyers looking to buy new Vancouver property over $400,000 will receive a maximum BC HST rebate of $20,000, but will see the purchase price above that level subject to the extra five per cent tax rate system.

Those who buy or build new homes, or substantially renovate their homes, are eligible for this rebate of up to $26,250.

To find out how much tax you will pay on new housing before and after July 1st, enter the price in the new home HST calculator.

Those who buy or build new rental housing, or who substantially renovate their rental housing, will be eligible for a rebate of up to $26,250 per unit.

For More Info

For any other questions regarding HST please email me or go directly to: 

http://www.cra-arc.gc.ca/gncy/hrmnztn/bc/menu-eng.html

or 

http://www.sbr.gov.bc.ca/documents_library/notices/HST_Notice_001.pdf