A few HST questions answered
Current | After July 1 | ||
Purchase price | $800,000 | Purchase price, less 2% | $784,000 |
GST (5%) | 40,000 | HST (12%) | 94,080 |
PTT | 14,000 | PTT | 13,680 |
HST rebate | (26,250) | ||
Total cost | $854,000 | Total cost | $865,510 |
MYTH: The HST applies to homes that ‘look and feel’ new – one or two years old and listed for the first time on the MLS® after having been sold once by the developer.
FACT: The HST applies to new homes being sold for the first time and homes that have been substantially renovated (90% or more), similar to the current application of the GST on new homes. The purchase agreement has to be signed after November 18, 2009, with possession dated on or after July 1, 2010.
MYTH: The HST is a new tax burden of 12 per cent on new homes worth more than $525,000. A typical new detached home in White Rock ($800,000) will cost $96,000 more after July 1, 2010 (not even factoring in the Property Transfer Tax).
FACT: After July 1, 2010, a new $800,000 home in White Rock will cost $11,510 more than it would have cost on June 30. First, the 5 per cent GST has always applied to new homes. Second, the provincial HST rebate of $26,250 is available for the purchase of all new homes worth more than $525,000, even much higher-priced homes.
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