Today, The BC Government announced that on April 1, 2013 the HST will be eliminated and that affective very soon, on April 1, 2012, The HST payable on many new homes will be reduced. This means savings for buyers of new homes priced over $525,000 before tax.
Currently, there is a rebate of 5% of the 12% HST up to a maximum of rebate of $26,250 which is reached at a $525,000 house price. Starting on April 1, 2012, the maximum rebate climbs to $42,500 which means that a buyer doesn't reach the maximum rebate until the new home price is $850,000.
To look at it another way, a house that sells for $525,000 before HST will cost the same at least until April 1, 2013. A home that sells for $850,000 before HST, will attract $16,250 less HST starting on April 1, 2012.
Many new homes are marketed "including the HST." Keep in mind that the prices don't automatically change on these homes. However, I do expect that most developers will adjust there prices downwards by April 1, 2012 to reflect the tax savings.
One more very important point... the government announced that this rebate will now also apply to secondary vacation homes. This is brand new. Currently, the rebate only applies to primary residences. The information on this significant new rebate is still being clarified, but if it is what it sounds like, it will be a huge savings for secondary home buyers.
Keep in mind, that these HST changes don't come into affect until April 1, 2012. If you are completing the transaction of a new home before April 1, 2012 you pay the standard HST.
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