Over the last couple of months we've been hearing a lot about how the amalgamation of P.S.T. & the G.S.T will bring "harmony" and tax incentives to the residents and businesses of B.C. 

So how will the new Harmonized Sales Tax (H.S.T.) affect new home buyers effective July 1, 2010.

  • Contrary to what the BC Government has told the public, the new home BC HST tax increase will affect all new homebuyers.
  • The BC HST Price Chart (shown below) indicates that the total cost of a new home in the province will cost anywhere from 2% to over 7% more than compared to the current 5% GST only system.
  • The BC HST price difference and tax increase on new homes will have a profound influence on the Victoria first time homebuyers market. The extra 12% tax burden won't be financed by the major banks, and therefore, the BC HST tax increase will only force many first time homebuyers out of the new housing market.
  • With decreased demand from the BC first time homebuyers market because of the new home HST tax increase and significant price difference as seen in the BC HST Price Chart, there will be a slow down in the new housing construction industry.
  • Although the partial HST rebate can be applied to any new Victoria and B.C. home or real estate purchase, only properties under the value of $400,000 will benefit directly from the rebate. All other new home purchases over $400,000 will be subject to the full 12% HST with only a partial B.C. HST rebate of $20,000 maximum.
To check out a real cool chart showing the breakdown of how much more you'll be paying for new home housing effective July 1, 2010, click on the following link: