New home HST threshold goes to $525,000
Peter Simpson is CEO of Greater Vancouver Home Builders Association.
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The B.C. government is giving a bigger break to new home buyers in the latest move to ease the impact of next year’s harmonized sales tax.
The threshold for the HST rebate will be increased from $400,000 to $525,000, Finance Minister Colin Hansen announced Thursday. That means purchasers of a new home costing up to $525,000 will not pay increased sales tax when the HST takes effect next July 1.
“We heard the concerns from consumers and industry about how the HST might affect home buyers, and this increase will move the threshold to above the average new home price in the province,” Hansen said. “A similar rebate will also support the construction or substantial renovation of affordable rental housing.”
NDP finance critic Bruce Ralston said the increased sales tax break is mainly “cosmetic,” and he wants to see a cost estimate that would indicate how many buyers are actually going to benefit.
“The new home builders wanted the threshold to be raised to $600,000,” Ralston said. “The average price of a new home in the Lower Mainland is $620,000, so this doesn’t come anywhere near meeting that.”
Peter Simpson, CEO of Greater Vancouver Home Builders Association, said the new threshold shows “the government has been listening and has responded to our concerns.
“It’s a big step up from $400,000,” he said, noting that his association had said from the day the HST was announced that the threshold was too low.
Still, “many homes will not be captured by this (increase),” he added.
He expects most new apartments and townhouses will qualify for the rebate, but said only a small number of single-family homes in the Lower Mainland are priced at $525,000 or less.
Simpson said the provincial government needs to take a hard look at all the other taxes on housing, notably the property transfer tax, which amounts to $8,500 on a home worth $525,000.
“The tax burden and the tax pyramid on buyers of new homes is a big concern,” he said.
— with files from Frank Bucholtz
