The BC government has introduced disclosure requirements for builders (i.e., sellers) during the transition period to clarify the taxes and rebates that are included in the sale price stated in the Contract of Purchase and Sale.
Agreements entered into from December 1, 2012 to March 31, 2015 must contain the following prescribed information:
- the value of consideration (i.e., purchase price), disclosure of whether tax is inclusive or exclusive of the price, and a breakdown identifying the amount and rate of each tax and/or rebate where applicable;
- a statement that discloses whether or not the seller is a foreign supplier (essentially, a “foreign supplier” is not resident of Canada); and
- if the seller is not a foreign supplier, then the following Notice to Purchaser “If (a) both ownership and possession of newly constructed or substantially renovated housing transfer on or after April 1, 2013 and (b) either ownership or possession of the housing transfer before April 1, 2015, then
- the 7% provincial component of the HST and the BC HST new housing rebate for primary places of residences will not apply,
- the 2% BC transition tax may be payable by the buyer, and
- the supplier may be eligible for a BC transition rebate in respect of the housing.
NOTE: An alternate Notice to Purchaser is required where the seller is a foreign supplier.
Buyers may wish to ensure that an appropriate allocation of the temporary transition tax and transition tax rebate is factored into negotiations between the buyer and seller.
To facilitate the disclosure of this required information, REALTORS® have available through WEBForms® the following addendums for use with the Contract of Purchase and Sale (CPS) during the transition period:
- BC2064 Rev. 5 Apr 2013 - CPS New Home Addendum (Seller is a Foreign Supplier) before April 1, 2015
- BC2061 Rev. 5 Apr 2013 - CPS New Home Addendum (Seller is Not a Foreign Supplier) before April 1, 2015
Two guides, "Contracts of Purchase and Sale - New Home Addendums" and "Contracts of Purchase and Sale - New Home Addendums - BC Transition Tax," are also available on WEBForms® to help REALTORS®.
For examples of builder information requirements, see the Canada Revenue Agency GST/HST Info Sheet GI-132: Eleimination of the HST in British Columbia: Builder Information Requirements for the Transition Period" (December 2012).
NOTE: Special rules apply where agreements were entered into prior to November 18, 2009 and/or construction/substantial renovation of homes began before July 2010 and ownership and possession will transfer after April 1, 2013.