Macrealty Market Update Harmonized Sales Tax (HST)’s effect on real estate prices in BC
All new residential construction will now be taxable at the 12% rate rather than the previous 5%. To offset some of this, the government has introduced a New Housing Rebate which will significantly reduce the burden of the additional tax up to a house value of $525,000. For new construction valued at over $525,000, the purchaser will receive a flat rebate of $26,250, meaning the increased burden of this tax will only affect those purchasing a new home over $525,000.
The HST should have little to no effect on the resale market as 'used' homes are not subject to GST and will not be subject to HST. Instead, the government has a Property Transfer Tax, which will remain the same: 1% on the first $200,000; 2% on the balance.
If you have any question regarding the current real estate market, please contact me by phone or email.