the HST, Real Estate and You
How will the HST impact real estate?
B.C. consumers will soon be paying much more tax on items that were previously exempt from the provincial sales tax, including real estate. Those who buy new homes were previously exempt from the PST but not the GST. Effective July 1, 2010 new homes will be subject to the full HST of 12%. REALTOR® commissions, appraisals and other services will also be subject to a 12% HST, replacing the 5% GST now charged
Is there any relief for buyers of new homes?
Sales of used homes will not be subject to the HST
Homebuyers in B.C. are charged a property-transfer tax when purchasing a new home. One per cent on the first 200,00 and 2% on the remainder. There is a partial exemption for first-time homebuyers (up to $450,000). There is no change to this. Currently sellers pay 5% GST on Realtor commissions, after the HST this will rise to 12%. Buyers currently pay 5% GST on the cost of a home inspector, this jumps to 12% with the HST. Legal conveyance fees to transfer title go from the current 5% GST to 12%. Sellers looking to do repairs or upgrades to make their homes marketable will also be paying a 12% HST on all materials and services.
July 2010 the new HST will increase the cost of buying and selling real estate. If you are thinking about selling or buying a home in the new year, save yourself money – do it before the implementation of the HST. Look for a burst of activity this Spring, especially in new housing sales as people try to beat the deadline. Expect to pay more taxes on everything!