.....and a few more HST related questions.

(NOTE: The provincial government estimates that prices of new homes currently include about 2 per cent embedded provincial sales tax paid on the materials used in construction. The government anticipates that prices of new homes will decrease by 2 per cent after the HST is implemented because builders will be able to recover the tax paid on materials through input tax credits.)

Need help calculating the HST and available rebates on a new home? The Ministry of Finance has just launched a New Home HST Calculator accessible viahttp://hst.blog.gov.bc.ca (under Helpful Links).

MYTH: Everything to do with my new home will be levied the HST: All fees for professional services in the purchase of the home (REALTOR®, legal and appraisal fees, etc.); home insurance; utilities (natural gas, hydro and electricity); and, the purchase of new furniture and electronics.

FACT: Not everything will be impacted by the HST.

• YES – HST will apply to all fees for professional services in the purchase or sale of a new OR resale home (as does the 5 per cent GST now). Therefore, all of these services will cost 7 per cent more.
• NO – Home insurance is exempt from the HST.
• NO – Home heating fuels are all eligible for a point of sale rebate and will see no impact from the HST.
• NO – Furniture and electronics will see no tax change. The 12 per cent (GST and PST combined) already applies to furniture and electronics, therefore buyers will see no difference.

As the British Columbia Real Estate Association recently reiterated to the BC government, shelter taxes (HST and PTT) significantly contribute to the cost of a home purchase, which is why we continue to recommend the government to make further changes to both the HST and the PTT.

However, it’s important for the public to know that although the tax burden on housing is set to increase on July 1, it would have been worse had it not been for REALTORS® and other representatives in the housing industry. BCREA successfully lobbied to mitigate the impact of the HST – getting the threshold increased to $525,000 from $400,000 and the HST rebate raised to $26,250 from $20,000.