Karen Tsao | 604-422-0855

 

On April 1, 2013, the Harmonized Sales Tax (HST) will be replaced by the federal Goods and Services Tax (GST) and the BC Provincial Sales Tax (PST).  So when does HST apply and when does GST apply?  These two charts below should help you clear some confusion. 

 


 

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For the fourth time in as many years, the Federal Government has announced action to restrict mortgage credit. The new measures include:

  • The maximum amortization on a prime mortgage will be reduced from 30 to 25 years.
  • Mortgage insurance will not be provided for properties valued over $1 million.
  • Refinancing has been lowered from a maximum of 85% loan-to-value to a maximum of 80% loan-to-value.
  • The maximum gross debt service (GDS) and total debt service (TDS) will be limited to a maximum of 39% and 44% respectively. Currently, GDS does not apply to qualified borrowers with credit scores over 680.

These measures will take effect July 9, 2012.


For more information, here’s the government’s Q and A document: www.fin.gc.ca/n12/data/12-070_2-eng.asp

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Following on the February announcement of transitional rules, in May Minister of Finance Kevin Falcon introduced legislation to implement the Provincial Sales Tax (PST) and relief measures for the new housing market.

  • Bill 45: Income Tax Amendment Act, 2012 – Provides for the BC First-Time New Home Buyers’ Bonus, a one-time refundable income tax credit (to a maximum of $10,000) for first-time homebuyers who purchase newly-constructed homes. More information, including application forms, is available online.


  • Bill 54: Provincial Sales Tax Act – Reinstates the PST, as of April 1, 2013, essentially as it was before implementation of the Harmonized Sales Tax (HST), though the language of the new legislation is more straightforward and some administrative improvements are evident. Most exemptions will be included in regulations, which are expected in fall 2012.


  • Bill 56: New Housing Transition Tax and Rebate Act – Implements the temporary 2% transitional tax, which will apply to newly-built homes where construction begins before April 1, 2013, but ownership and possession transfer after that date; also reinforces the promise that the 7% provincial portion of the HST (after April 1, 2013, known as the PST) will not apply to new homes—and never applied to resale homes.


  • Enhanced BC HST New Housing Rebate – The province has increased the threshold to $850,000 from $525,000 for new housing used as a primary residence where HST is payable between April 1, 2012 and April 1, 2013 (maximum rebate: $42,500). More information, including applications forms, is available online.


  • Grant for New Secondary or Recreational Residences – Effective April 1, 2012, a grant of up to $42,500 for the provincial component of the HST is available for buyers of newly-constructed secondary homes outside of the Greater Vancouver and Capital Regional Districts, between April 1, 2012 and April 1, 2013. More information, including application forms, is available online.


    Resources: BCREA

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