What you need to know about GST when buying Real Estate.

When you buy a new home from a builder or developer in BC, GST is charged on top of the purchase price. You will commonly see this additional 5% on presales and new construction homes. Even if the home is complete the 5% will still apply.The information provided in this blog will detail the GST New Home Rebates that could potentially apply to you when purchasing a new home or presale in Vancouver BC.The blog will also outline purchase prices that qualify and the sliding scales for partial rebates.Knowing the ins and outs of GST can save you money when buying a new home in Greater Vancouver.

GST on a Real Estate Purchase

GST is applied on top of the purchase price of new homes in BC. GST is payable only on newly constructed properties being sold by a developer or owner builder. Some examples of new homes in Vancouver would be pre-sale condos and townhomes as well as spec houses.

Homes that are not brand new and have already been occupied are exempt from GST. The GST in re-sale homes has already been paid for by the original purchaser. The government only charges the GST on the first purchase.

How much is the GST Rebate for New Homes in BC?

The GST housing rebate is dependent on the price of the new home. Unfortunately, in order to receive the maximum rebate which is 36% of the 5% GST the price must be $350,000 or less. It would be very hard to find a new home of this price in the Great Vancouver Area. This number seems a little behind the times with current real estate values.

Full GST Rebate = 36% Rebate of 5% GST

In order to qualify for the full rebate:
The price of a new home must be $350,000 or less the purchase price of a new or presale home
The property must be your principle residence (not an investment property)
At a purchase price of $350,000, the full rebate is $6,300.

Partial GST Rebate

In order to qualify for the partial rebate:
The price of a new home must be more than $350,000 and less than $450,000
The property must be your principle residence (not an investment property)
The rebate is gradually reduced and is calculated by using the following formula:
$6,300 x [$450,000 – the qualifying purchase price] / $100,000An example with a purchase price of $420,000:
$6,300 x [$450,000 - $420,000] / $100,000 = $1,890

If the purchase price is above $450,000, No GST Rebate applies.
If you are claiming the rebate, it is important to know the GST must be paid in full at the time of completion.
GST Calculator

If you are looking for an easy way to calculate the taxes on your next home purchase the following link is a great tool.

Are you thinking about Buying a property in North Vancouver? Our team is experienced at representing buyers in the Greater Vancouver Real Estate market. Please reach out at any time and we would be happy to help. We can provide you a clear picture of all the costs associated with a purchase.

Contact: Carson Green by calling or texting 604-506-5364. If you prefer email carson@wallacegreen.ca. We look forward to helping you with your next home purchase