The New Harmonized Sales Tax ( HST )
To buy newly built homes, buyers need to pay the HST. However, the government is working to phase out the HST and bring back the PST (Provincial Sales Tax). The HST will be eliminated on April 1, 2013.
The transitional rules will start on April 1st this year. The new housing rebate threshold will be increased to $850,000, more than 90% of newly built homes will now be eligible for a HST rebate and the maximum rebate will be $42,500. Before the change, the new housing rebate threshold was $525,000 and the maximum rebate was $26,250. For new houses priced between $525,000 to $850,000, buyers will now get more rebate up to $42,500. For new houses less than $525,000, there is no change.
For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.
Source: REBGV February, 2012
ADA TSE 604-318-8888