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Moving Forward

FAQs Questions about returning to PST

Legislation Information on Legislation introduced on May 14, 2012

Independent Panel

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What Has More Tax? Items with More Tax Under the HST

What Has the Same Tax? Items with No Tax Increase Under HST

What Has Less Tax? Items with Lower Tax because of the HST

Rebates and Exemptions Actions to Offset the Impact of the HST

Buying a Home? Housing Transitional Rules

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Your Budget The HST and Your Daily Expenses

Running Your Home HST and Ongoing Expenses

Lower Income British Columbians Information on the B.C. HST Credit

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New Housing Rebate

Does the HST apply to all housing?

No.

The HST only applies to “new” residential housing; "used" or resale (i.e., previously occupied) residential housing is not subject to HST.

Is B.C. providing a rebate for newly built homes?

Yes.

B.C. provides a rebate for new housing purchased as a primary residence to ensure that, on average, purchasers of new homes up to $525,000 do not pay any additional tax due to harmonization. That is, they will pay no more in provincial HST than was previously embedded as PST in the price of a new home.

The rebate is available whether the new housing is to be owner occupied or rented.

How much is the new housing rebate?

The rebate is 71.43 per cent of the provincial portion of the HST, up to a maximum rebate of $26,250.

Purchasers of eligible new homes above $525,000 are eligible for a rebate of $26,250 (i.e. a rebate on the first $525,000 of value).

As the HST rate drops in 2012 and again in 2014 the rebate will be lowered to reflect the drop to a 5 per cent provincial portion of the HST.

Why isn’t there a rebate for previously occupied housing?

The HST doesn't apply to previously occupied housing, making a rebate unecessary.

Which types of housing are eligible for the rebate?

The B.C. new housing rebate is available for all types of housing eligible for the federal GST/HST new housing rebate and is subject to the same eligibility conditions.

Qualifying housing generally includes newly constructed and substantially renovated homes used as a primary place of residence by an individual (or qualifying relation of the individual).

Is there any rebate for new rental housing?

To support affordable rental housing in the province, B.C. also provides a new rental housing rebate of 71.43 per cent of the provincial portion of the HST, up to a maximum rebate of $26,250 per unit.

Who is eligible for the new rental housing rebate?

The new rental housing rebate is provided to landlords who construct or substantially renovate their own rental housing and, as a result, are required to self–assess and pay HST under the self–supply rules.

The rebate is also provided to landlords who purchase newly constructed or substantially renovated rental housing in B.C. and pay HST on the purchase.

Which types of rental housing are eligible for the rebate?

The new rental housing rebate is available for all types of new or substantially renovated rental housing eligible for the federal GST/HST rebate for new residential rental properties, and is subject to the same eligibility conditions.

Why isn’t the rebate rate 100 per cent?

New housing was not directly subject to PST (i.e. the purchaser of a new home did not pay PST on the purchase price). However, builders paid PST on most construction materials (e.g. wood, cement, plaster, nails, etc.) used to build a home. The PST was part of the cost of building the home and included (embedded) in the total selling price of the home. It is estimated that the embedded PST in new homes in British Columbia was – on average – equal to about 2 per cent of the price.

Unlike with the PST, under the HST there is no sales tax embedded in the price of new homes because builders, like most other businesses, recover the HST they pay on their materials through input tax credits. Without a rebate, the provincial tax on new homes would have effectively increased from about 2 per cent on average (embedded PST) to 7 per cent (provincial portion of the HST).

The rebate rate was set to ensure purchasers of eligible new homes up to the $525,000 threshold pay no more provincial HST on average than under the PST.

Rebate rate: (7 per cent B.C. HST minus 2 per cent embedded B.C. PST) / 7 per cent B.C. HST

Rebate rate = 5/7 = 71.43 per cent of provincial portion of HST paid, to a maximum of $26,250.

Total Sales Tax Payable on New Homes

Who administers the new housing rebates?

The new housing rebates are administered by the Canada Revenue Agency.

I’m a builder and need a Letter of Good Standing to get the PST transitional new housing rebate. How do I get a letter?

The application for the PST Transitional New Housing rebate must be submitted to the Canada Revenue Agency (CRA). However, as a condition for obtaining the rebate, builders are required to obtain a Letter of Good Standing from the British Columbia Ministry of Finance.

Apply for a Letter of Good Standing.

If your business has no outstanding provincial tax debts, you should receive your Letter of Good Standing within 2-3 weeks. The Letter of Good Standing is good for one year.

Additional information for new housing rebates

Transitional rules regarding the application of the HST to new housing were released on November 18, 2009.

B.C. New Housing Rebate and Transitional Rules Bulletin

Additional information about the new housing rebate and housing transitional rules is available on the Canada Revenue Agency’s website at the following link:

New Housing Rebate

If you have any questions, please contact the Canada Revenue Agency at 1‐800‐959‐8287.

New Housing Rebate

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