Just Like B.C, Ontario’s HST was also introduced in July of 2010. It looks as though there is confusion right across the board! Just see what Ipsos Reid has discovered!
Don’t Get Bent out of Shape over HST.
Here’s Why:
January 20, 2011
Columnist: Gillian Krol; Founder of GoldilocksEstates.com and Licensed Kelowna Realtor® with RE/MAX Kelowna
There is still a huge amount of confusion surrounding HST. I’ll try to keep my opinions to myself, but, let me just say it’s rather frustrating that this new tax was introduced in July of 2010 without any proper education offered to homeowners as to how this new combined tax will impact the sale of your home.
Let me point out the important information that many of you may not know. This should come as a relief.
If your home is not considered new construction, and what I mean by new construction is that you are not the first occupier, first homeowner of your home; HST will not be added on to the sale price of your home. Therefore, there is no need to negotiate or address HST in your contract of purchase and sale if all taxes were already submitted by a previous homeowner.
There are of course a few exceptions to this rule for older properties where current homeowners have managed to defer their taxes on to a new homeowner, but in most cases the HST has not been deferred. Nonetheless, always always request official documentation from the listing REALTOR [R] clarifying that all taxes were previously submitted on the property and that any new homeowner will not assume the responsibility of remitting taxes on the sale of a home that has been previously owned and occupied. Be sure to view this document of information on HST provided in 2010 HST BC Real Property .
For those building a home, or purchasing a new spec house on freehold land, HST will apply. Both the Seller and Buyer can negotiate who will remit the HST tax upon the completion date. If a buyer is purchasing a new home that they intend on using as a primary residence, rebates will apply for residential real estate purchases under $1,000,000. These rebates should reduce your anxiety about this new British Columbia HST tax. See Chart Below
Again, tax information can be rather confusing. Always consult a 3rd party professional like a chartered accountant before committing to the purchase of a new single family home here in Kelowna or anywhere else in the Okanagan or province of British Columbia.
Net Harmonized Sales Tax and Property Transfer Tax Payable
| Purchase Price | PTT
(1st time buyer) |
PTT
(non-1sttime buyer) |
Gross HST | GST portion of Rebate* | Provincial
portion of Rebate** |
Net HST payable | Net Price
(1st time buyer) |
Net Price (non-1st time buyer) |
| $250,000 | $0 | $3,000 | $30,000 | $4,500 | $13,000 | $12,500 | $262,500 | $265,500 |
| $350,000 | $0 | $5,000 | $42,000 | $6,300 | $17,500 | $18,200 | $368,200 | $373,200 |
| $400,000 | $0 | $6,000 | $48,000 | $3,150 | $20,000 | $24,850 | $424,850 | $430,850 |
| $425,000 | $0 | $6,500 | $51,000 | $1,575 | $21,250 | $28,175 | $453,175 | $459,675 |
| $435,000 | $2,680 | $6,700 | $52,200 | $945 | $21,750 | $29,505 | $467,185 | $471,205 |
| $445,000 | $5,520 | $6,900 | $53,400 | $315 | $22,250 | $30,835 | $477,280 | $482,800 |
| $450,000 | $7,000 | $7,000 | $54,000 | $0 | $22,500 | $31,500 | $488,500 | $488,500 |
| $500,000 | $8,000 | $8,000 | $60,000 | $0 | $25,000 | $35,000 | $543,000 | $543,000 |
| $525,000 | $8,500 | $8,500 | $63,000 | $0 | $26,250 | $36,750 | $570,250 | $570,250 |
| $600,000 | $10,000 | $10,000 | $72,000 | $0 | $26,250 | $45,750 | $655,750 | $655,750 |
| $1,000,000 | $18,000 | $18,000 | $120,000 | $0 | $26,250 | $93,750 | $1,111,750 | $1,111,750 |
*Assuming purchaser qualifies for the New Housing Rental Rebate and that the Vendor is providing credit at time of closing.
** Assuming the Vendor is providing credit at time of closing