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Clarification of New rules for Vancouver real estate HST tax in 2012

March 18, 2012

Filed under: Vancouver — Richard Morrison @ 4:40 pm
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Announced last month, the new guidelines of British Columbia HST Transitional tax have given a much-needed certainty in terms of tax structure for the new home buying market for Vancouver homes.

As British Columbians were not in favor of the HST last year, the British Columbia Government left with no option than to wait and discuss the transitional guidelines for the HST tax on property that is newly developed in the province. Due to this delay in feedback, lots of Vancouver and British Columbia real estate professionals kept on giving warning about a ‘Vancouver housing bubble’, with home buyers not interested in buying until there is more certainty in the market.

The announcement by Finance Minister was quite significant in the sense that it injected confidence in the real estate market of Vancouver, which has witnessed tremendous dip in sales over the year or so, while prices continue to jump in lots of Lower Mainland portions. On the other hand, outside of Vancouver, British Columbia property prices continued to decrease because of increased inventory and not many buyers.

According to the announcement of Finance Minister, the new property taxes are going to be equitable in the transition. Below you will find more information on the 2012 BC HST Transitional Rules, which was announced last month.

To start with, from April 1, 2013, British Columbia is going to become PST rather than HST. Furthermore, new homes will be subjected to only the British Columbia part of HST. Talking about the British Columbia HST Rebate threshold, there has been a jump from the previous $525,000 to $850,000. What’s more, the maximum British Columbia HST Rebate has been increased to $42,500 from the earlier $26,250.

Finance Minister is of the opinion that more than 80 percent of new houses in British Columbia are much lower than the threshold limit. With these new rules, new Vancouver home buyers are going to save around $60 million.

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