Returning to PST

(February 20, 2012 )

As many have heard, BC will return to the PST on April 1, 2013. The Government has recently announced some transitional rules for returning to the previous tax system. The housing transition rules help ensure when people buy a newly constructed home under the PST, whether built entirely under the HST, entirely under the PST, or partly under both, they will all pay a consistent and equitable amount of tax.

Specifically:

Before April 1, 2013: HST applies. The BC new housing rebate threshold will be increased to $850,000 (starting April 1, 2012). Purchasers will be eligible for the provincial rebate of up to $42,500.

After April 1, 2013: PST applies. On average, about 2% of the home’s final price will again be embedded PST. Builders will once again pay PST on their building materials.

For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price. This ensures equitable treatment among purchasers and will help mitigate distortive market behaviour. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double-taxation on homebuyers.

For additional details visit: http://www.pstinbc.ca/

Returning to PST

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