The B.C. government is raising the price ceiling for new home rebates under the harmonized sales tax (HST) and has announced that the controversial tax will officially end on April 1, 2013.
Finance Minister Kevin Falcon told home builders at a Victoria meeting February 17 that the new housing rebate ceiling will be raised to $850,000, effective April 1, 2012, from $525,000. According to Falcon, the new limit will cover more than 90 per cent of new homes built in B.C. The rebate will be for a maximum of $42,500, he said. Also, for the first time, the HST rebate has been extended to secondary vacation or recreational homes, which will qualify for the same price threshold and rebate as new principal residences. The HST, a 12 per cent sales tax, has always applied only to newly built homes, not resale housing
"B.C. will return to the PST [7 per cent provincial sales tax] on April 1, 2013," Falcon said.
The HST was voted out during a province-wide referendum in August 2011, and home builders had complained that the lack of clear transition rules was slowing sales of new homes. Peter Simpson, executive president of the Greater Vancouver Home Builders' Association, said home builders are generally happy "that we finally have some clarity." Simpson called Falcon's announcement "a good step forward."
