Monday, February 22, 2010 LOOMING HST FOR REAL ESTATE HITS HUGE IN BRITISH COLUMBIACategories:Aldergrove Langley,Fraserview VE,Harmonized Sales Tax,Langley Real Estate,North Surrey Real Estate,Sullivan Station,Surrey Real Estate,Vancouver East Real Estate,Whalley
If you don't know about HST then you should learn about it, and if you do know about HST then you should stay on top of it. The date for the implementation is still looking to be july 1st , 2010. Of course on most things you buy are already subject to gst (5%). Of course the Harmonized Sales Tax(HST) will terminate PST and combined it with GST. This means you will be paying 12% taxes on top of your purchases. So that $80 to fill up your car with gas after July will cost you $90! This is quite a lot of cheese coming from your very own pocket. Now the depressing part… in reguards to real estate… if you bought a new $800k house will be taxed an extra $96k!! $96k.. say that to yourself in your head! This means that you will need one hundred thousand dollars in your bank account to pay UPFRONT for your new home before you can even set foot in it, and that’s not to mention your downpayment and property transfer tax on top of it all! So let me break it down for you: Before July 1st: With 5% down on a New House $800k $40k Downpayment $40k GST (5%) +$14k Property Transfer Tax ______ $94k Total Moneys needed UPFRONT (NON BORROWABLE) After July 1st : 5% down on a New House $800k $40k Downpayment $96K HST (12% = GST + PST) +$14k Propterty Transfer Tax ______ $150k Total Moneys needed UPFRONT (NON BORROWABLE) Of course this is just an example, and HST will be applied across every medium such as moneys paid for lawyer fees, inspection etc. Now before you go and jump off a bridge, let me tell you that it’s not all gloom and darkness! There is a light at the end of the tunnel… kind of hahaha. There is a tiered rebate system which the govenrment is giving back to the good people. It hasn’t been formally released yet but it looks like you will receive at a maximum of $20k . So kiss your Ferrari goodbye and say hello to my friend named Toyota Camery! http://www.bcrelinks.com/a http://www.bcrea.bc.ca/hst Please feel free to post your comments, concerns and questions here so that we can all benefit from this discussion. Tuesday, July 28, 2009 HSTHarmonized Sales Tax
On July 23, 2009, Premier Gordon Campbell and Finance Minister Colin Hansen announced that, effective July 1, 2010, BC will adopt a Harmonized Sales Tax (HST), combining the seven per cent Provincial Sales Tax (PST) with the five per cent federal Goods and Services Tax (GST) for a single sales tax rate of 12 per cent. An additional seven per cent tax will be charged on a variety of real estate related services, including commissions, appraisals and other services that are currently exempt, as well as adding thousands of dollars in additional costs to new home purchases. Looking to offset the increase in costs, the Government of BC plans to offer a partial rebate of the provincial portion of the HST for new housing to ensure that new homes up to $400,000 will bear no more tax than under the current PST system, while homes above $400,000 will receive a flat rebate of about $20,000. What does this mean for REALTORS®? New home sales over $400,000 will be dramatically impacted, as buyers will now have to pay an additional seven per cent tax (even with the $20,000 flat rebate). This will act as a disincentive to buyers of new homes in the short term.
This information was emailed to me by the British Columbia Real Estate Assosiation and I felt the need to pass this information on.
I post a question to all readers, How can we go about not letting this happen? Is there a way? |
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