I’ve had several interested clients asking me if they should wait until after the HST is reversed to buy a home. There are several issues here.
The first is whether or not you are buying a “used” home or a “new” home. There never was HST or GST payable on “used” housing. The tax is paid at the time of the first purchase of the home by a home buyer.
If you are considering a purchase of a “new” home – then the answer I would give is “it depends” and “maybe”. If you were to buy that new house or condo now or in the near future, then the answer I believe is “yes”, the HST would be applicable. However, contrary to many people’s understanding, the HST did not necessarily make that home purchase more expensive. As was the case under the GST system, home buyers could be eligible for several rebates of the total tax payable thereby reducing the net tax a home buyer would end up paying on the purchase.
I’m not sure what the transition back to the old GST system is going to look like. When the HST was being implemented, there were seminars held to update those in the housing industry about how that transition period would work. To my knowledge that has not happened yet in the reversal of the HST.
Your best bet, if you want to know what you will be looking at in exact numbers after rebates, is to talk to your accountant or lawyer.
So, if buying a “new” home, I don’t think it will make a huge difference to the price whether you decide to wait or not. If the home you are interested in is there now, it’s probably better to take advantage of the current low property values and lock in the lower purchase price.
Keep in mind, whether GST or HST applicable, “new” or “used”, the Property Transfer Tax will apply. This tax is payable on the transfer of real property in BC at a rate of 1% on the first $200,000 of market value and 2% on the balance of the market value of the property you are acquiring. Again, there are exceptions particularly First Time home buyers may. If you’re in doubt, again check with your lawyer or accountant.
