HST rebate increased for new homes
Finance Minister Colin Hansen has extended an extra break for new homes from next year's harmonized sales tax.
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Updated: November 19, 2009 10:54 AM
VICTORIA – 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."
With mortgage rates at record lows and house prices rising around the province, the impact of the increase will be negated in about nine months, Ralston said.
Hansen hinted earlier this week that school districts may get a break on their costs related to the HST when the government tables its budget this spring.
B.C. has already used up most of the exemption it is allowed in the agreement with Ottawa to harmonize the federal and provincial sales tax, with adjustments for B.C.'s carbon tax on fossil fuels and a rebate on heating costs for homes.
