Enhanced BC HST New Housing Rebate

Frequently Asked Questions - HST New Housing Rebate

1. Is the April 1, 2012 date based on the contract/offer date or the completion date?

   It doesn’t matter what date the parties entered into the contract or removed subjects.  Provided the HST becomes payable between April 1, 2012 and March 31, 2013  buyers can be eligible for the enhanced BC HST new housing rebate.

2. When does the HST become payable?

   On the sale of newly-constructed homes, the HST becomes payable on the earlier of the following dates:

   • when the seller transfers ownership (also known as the completion date), OR 
   • when the seller transfers possession (also known as the possession date)

   
   

   Example 1	A Contract of Purchase and Sale is entered into on December 15, 2011, the seller transfers ownership on March 15, 2012 and the buyer takes possession on April 2, 2012. The buyer does not qualify for the enhanced BC HST new housing rebate.
   Example 2	A Contract of Purchase and Sale is entered into on December 15, 2011, the seller transfers ownership on April 6, 2012 and the buyer takes possession on April 15, 2012.  The buyer qualifies for the enhanced BC HST new housing rebate.

3. When does the HST become payable when the transaction involves a strata unit?

   The only difference for stratas is where the strata plan hasn’t been registered by the date possession is transferred. HST is payable on the earlier of the following dates:

   • when the seller transfers ownership (also known as the completion date), OR
   • 60 days following the date the strata plan is registered.

4. Who is responsible for paying the HST? The builder or the buyer?

   As was the case prior to the new transition rules, the buyer is responsible for paying the HST, and the seller is responsible for collecting and remitting it to the Canada Revenue Agency.

5. Are there any changes to which transactions qualify for the enhanced BC HST new housing rebate?

   No. The enhanced BC HST new housing and new rental housing rebates is subject to the same eligibility conditions as the existing HST rebates and is administered by the Canada Revenue Agency (CRA).

   The enhanced HST rebate threshold is available with respect to newly-constructed homes purchased or built as a place of primary residence, or for the purpose of renting to residential tenants for a period of at least one year, where HST becomes payable on or after April 1, 2012 and before April 1, 2013.

   HST is not payable on the purchase price of existing homes.

6. Are there any changes to the process for obtaining the rebate?

   The buyer is entitled to receive the enhanced rebate either by filing a rebate application directly with the CRA, or by assigning their right to the rebate to the seller who in turn will pay or credit the enhanced rebate amount at the time of purchase (in which case, the buyer must assign the rebate to the seller and the seller files the rebate application).

   Only one rebate application can be sent to the CRA with respect to a home, either from the seller or the buyer, so the parties must be clear on who is taking responsibility for submitting the application.

   Example

   The contract for the purchase of a new home was entered into before the enhanced rebate was announced, though the purchase now qualifies for the enhanced BC HST new housing rebate. The purchase price includes HST if the buyer assigns the BC HST new housing rebate to the builder. Who is entitled to the enhanced rebate? If the parties negotiated a Contract of Purchase and Sale where the purchase price included HST and the buyer assigned the HST rebate to the builder, then the builder would bear the risk and/or get the benefit of any future increase or decrease to the HST rate and/or rebate. The builder is not required to reduce the purchase price to account for the enhanced HST rebate. In these circumstances, the parties must look to the specific terms of the contract.

7. Is the rebate available for rental properties?

   Yes. New rental housing with a value of $850,000 and above is entitled to the maximum rebate of $42,500, under the following conditions:

   • HST is payable on or after April 1, 2012 and before April 1, 2013, and
   • there’s a reasonable expectation that the property will be used as a primary place of residence for a tenant or the builder for at least one year.

   For qualifying multiple-unit rental housing (i.e., housing with more than two residential units), the maximum rebate amount of $42,500 will apply for each qualifying residential unit. The maximum rebate for residential land rentals is $14,025 for each qualifying lot or site.

   The new residential rental property rebate is administered by the Canada Revenue Agency, and more information is available online:

   • GST/HST Info Sheet GI-129, Harmonized Sales Tax: Proposed Enhancements to the British Columbia New Residential Rental Property Rebates, www.cra-arc.gc.ca/E/pub/gi/gi-129/gi-129-e.html
   • Guide RC4231, GST/HST New Residential Rental Property Rebate, www.cra-arc.gc.ca/E/pub/gp/rc4231/rc4231-e.html