Threshold being raised to $850,000 for new home purchase effective April 1, 2012
Government announces the transition rules for the HST early
The Honourable Kevin Falcon, Minister of Finance held a press conference on Friday Feb 17th in Victoria to announce transition rules for the harmonized sales tax and the affect it will have on the home building industry. Effective April 1, 2012 the threshold for new housing rebates will be increased from $525,000 to $850,000, including secondary homes. This means that new homes costing up to $850,000 will now be subject to only 2% of the Provincial portion of the HST, as opposed to the original 7%.
“We are elated the Provincial Ministry of Finance and the Federal Finance Department asked for our input and that our provincial government listened to the lobbying efforts of CHBA BC,” said CEO, M.J. Whitemarsh. “We had the confidence the Government would take our concerns to heart and implement the best solution for our industry; the news today was worth the wait and is even better than we could have anticipated.”
Since the referendum results to rescind the tax, the Canadian Home Builders’ Association of BC (CHBA BC) has worked diligently providing information from members to the government requesting the implementation of the transition rules be done as simply and quickly as possible to prevent any further stalling of the residential housing industry.
“The out-of-box forward thinking from the Government has created a stable situation for all CHBA BC members who build secondary homes,” Whitemarsh said. “Houses purchased as of April 1st will ultimately be receiving a $42,500 discount, now that the threshold has been raised.” (This is $850,000 of building costs x 5% = $42,500).
Releasing the transition rules on housing early was a wise and bold move on government’s part, one that is mutually beneficial. CHBA BC lobbied for a tax rebate to be created for consumers
on new home purchases and renovations, so the industry could move forward and gain momentum once again.
“Raising the threshold is a brilliant decision that is fair and equitable, a huge benefit to all consumers that will spur the market,” said Doug Wittal, President of CHBA BC. “Including the second home market outside the GVRD and CRD will create a huge boom, creating jobs and pushing the industry forward in very innovative ways.”
The 2012 budget will be announced Tuesday, February 21, 2012.