Welcome to the wonderful world of Harmonized Sales Tax (HST) on real estate transactions

Many people think that the dreaded HST doesn't kick in until July of next year. For purchasers of "pre-sold" new housing (that is new construction still in the course of construction, with an expected completion date after July 1, 2010) the HST era arrived today.

The HST transitional rules (the Residential Housing, New Housing Rebate and Transitional Rules) are now in effect for all purchase contracts entered into on or after midnight November 18, 2009. You can still escape the tax if the deal completes and ownership and possession change before July.

A small ray of sunshine brightened the November gloom, however, with the BC Government's  announcement that it will exclude new homes costing up to $525,000 from its proposed 12% HST scheduled to take effect July 1, 2010.

The government has also increased the rebate of the provincial portion of the HST paid on a new home to a maximum of $26,250. This represents a 30% increase over the original government proposed home price threshold of $400,000 and maximum rebate of $20,000.

So if you’re in the mood for a move, make sure you get your skates on.