Realtors advocate for home buyers, sellers and owners
Each year, the Real Estate Board of Greater Vancouver along with the BC Real Estate Association and real estate boards across the province make recommendations to the provincial government on how to better serve the real estate needs of home buyers and sellers.
On what do we base these recommendations? We base them on what we’re hearing from home buyers, sellers and owners – and throughout Metro Vancouver, Realtors have been hearing the same story: the level of taxation on housing is unaffordable, unsustainable and harmful to our economy.
Prospective new home buyers have been reluctantly sitting on the fence, waiting to see what the Harmonized Sales Tax ( HST) transitional rules would bring.
The Real Estate Board has advocated for:
• an increase in the threshold value of homes to be covered by the rebate;
• an increase in the rebate amount;
and
• an announcement of the transition rules for new homes as early as possible.
Good news – new HST/ PST housing rules
On February 17, 2012, we learned that the government listened to the real estate profession and would implement new measures to ease the tax burden on new home buyers.
As the province transitions back to the PST, which will replace the HST effective April 1, 2013, measures to ease the HST burden on new home buyers, include: The BC New Housing Rebate threshold will increase to $ 850,000 from $ 525,000, so that more than 90% of newly built homes will now be eligible for a provincial HST rebate effective April 1, 2012.
The maximum rebate will increase to $ 42,500 from $ 26,250 effective April 1, 2012.
Buyers of new secondary vacation or recreational homes outside the Metro Vancouver and Capital Regional Districts priced up to $ 850,000 will be eligible to claim a provincial grant of up to $ 42,500 effective April 1, 2012.
For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the 7% provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of 2% on the full house price.
The BC government advises that HST/ PST transition rules will help ensure that
On February 17, 2012, we learned that the government listened to the real estate profession and would implement new measures to ease the tax burden on new home buyers.
whenever purchasers buy a new home they will all pay a consistent and equitable amount of tax, whether the home is built: • entirely under the HST; • entirely under the PST; or • partly under HST and partly under
the PST.
More good news – a new BC First- time new home buyers’ income tax credit
On February 21, 2012, we learned that the government is implementing a temporary first- time new home buyers’ bonus.
Effective immediately to March 31, 2013, the bonus is a one- time refundable personal income tax credit for eligible first- time new home buyers equal to 5% of the purchase price of the home ( or if you are building your own home, 5% of the land and construction costs subject to the HST). The maximum personal income tax credit is $ 10,000.
How does this new program work?
If you are a first- time home buyer and you: • buy or build an eligible new home in BC; • you have never owned a primary residence; • you file a 2011 BC resident personal income tax return, or if you move to BC after December 31, 2011 and you file a 2012 BC resident personal income tax return; • you enter a written agreement of purchase and sale on or after February 21, 2012; and • HST is payable on the home if ownership or possession of the home transfers before April 1, 2013.
Eligible new homes include detached and semi- detached houses, duplexes and townhouses, condominiums, mobile and float homes and residential units in a cooperative housing corporation.
For more information on this new initiative visit www. bcbudget. gov. bc. ca/ 2012/ or phone 1.250.387.3332 or 1.877.387.3332.
How the good news translates into savings for first- time home buyers
If you have already signed an agreement to buy a new home and you will take possession before April 1, 2013, you will save money on the HST because of the creation of the BC Enhanced New Housing Rebate.
What are the consequences of high taxes?
When home buyers don’t buy, housing starts decline. There are fewer jobs in construction, and fewer jobs in all areas associated with home buying and selling, from carpenters and landscapers to home inspectors and surveyors.
Why are home sales so important to the economy?
Home sales and construction are good for the economy, generating significant economic activity, jobs and government revenue.
Each time a home listed on the Multiple Listing Service ® ( MLS ® ) system changes hands, the transaction generates $ 42,000 in economic spin- offs and 2.8 jobs. Every 100 MLS ® residential sales generate a whopping $ 660,000 in provincial taxes, $ 300,000 in federal taxes and $ 32,000 in municipal taxes, according to the BC Real Estate Association.
In 2011, 32,390 homes changed hands in the Real Estate Board of Greater Vancouver area, generating $ 1.36 billion in spin- off activity and 9,069 jobs.