Kyle Hislop

  I have been getting so many questions about how the HST works here in BC.  Even with all the press releases it still seems to be a complicated subject (which it is).  What I want to do is show some real pricing examples below of the cost of HST on New Construction properties.  If at the end you are still confused feel free to contact me via email with any questions you might have.  kylehislop@gmail.com


*  HST is only paid on the purchase of a NEW Property.
*  HST is NOT paid on any re-sale property.
*  Due to the government's rebate system, you will NEVER pay the full 12% and any NEW                 property. 

  The rebate system that the government is using is fairly complex so I thought I’d use 4 examples to help illustrate.  The HST is a combination of the Federal Portion Tax (5%) and the Provincial Portion Tax (7%).  In their system there are different rebates thresholds.  Under 350K is one.  Between 350K-450K is another.  Between 450K-525K is another.  Finally anything above 525K is another.

1.  When purchasing a NEW property under 350K you get the maximum rebate from both the Federal portion of the HST and the Provincial portion.

  ie:  $340,000 Purchase Price

Federal Portion Tax (5%) = $17,000

Provincial Portion Tax (7%) = $23,800

Rebates:

Federal Portion Rebate = $6,120

Provincial Portion Rebate = $17,000.01

Purchase Price $340,000 + $40,800 (Full Tax) = $380,800 - $23,120.01 (Rebates) = 

                     $357,679.99 (Total Purchase Price)

2.  When purchasing a NEW property between $350K-450K the Federal Portion rebate declines to $0 at 450K but you still receive the maximum Provincial Portion rebate.

ie:$420,000 Purchase Price

Federal Portion Tax (5%) = $21,000

Provincial Portion Tax (7%) = $29,400

Rebates:

Federal Portion Rebate = $1,890

Provincial Portion Rebate = $21,000.01

Purchase Price $420,000 + $50,400 (Full Tax) = $470,400 - $22,890.01 (Rebates) =

            $447,509.99 (Total Purchase Price)

3.  When purchasing a NEW property between 450K-525K there is no longer any Federal Portion rebate and the Provincial portion rebate will maximize at $26,250 at 525K.

ie: $510,000 Purchase Price

Federal Portion Tax (5%) = $25,500

Provincial Portion Tax (7%) = $35,700

Federal Portion Rebate = $0

Provincial Portion Rebate = $25,500.01

Purchase Price $510,000 + $61,200 (Full Tax) = 571,200 - $25,500.01 (Rebates) =

        $545,699.99 (Total Purchase Price)

4.  Finally any new purchase above 525K the only rebate is $26,250.

ie: Purchase Price $600,000

Federal Portion Tax (5%) = $30,000

Provincial Portion Tax (7%) = $42,000

Federal Portion Rebate = $0

Provincial Portion Rebate = $26,250

Purchase Price $600,000 + $72,000 (Full Tax) = $672,000 - $26,250 (Rebate) =

                 $645,750 (Total Purchase Price)

  I wish there was an easier way to explain how this all works but I hope these examples shed some light on the subject.

Kyle Hislop
RE/MAX