HST and BC Real Estate

I have been getting so many questions about how the HST works here in BC. Even with all the press releases it still seems to be a complicated subject (which it is). What I want to do is show some real pricing examples below of the cost of HST on New Construction properties. If at the end you are still confused feel free to contact me via email with any questions you might have. kylehislop@gmail.com


* HST is only paid on the purchase of a NEW Property.
* HST is NOT paid on any re-sale property.
* Due to the government's rebate system, you will NEVER pay the full 12% and any NEW property.

The rebate system that the government is using is fairly complex so I thought I’d use 4 examples to help illustrate. The HST is a combination of the Federal Portion Tax (5%) and the Provincial Portion Tax (7%). In their system there are different rebates thresholds. Under 350K is one. Between 350K-450K is another. Between 450K-525K is another. Finally anything above 525K is another.
1. When purchasing a NEW property under 350K you get the maximum rebate from both the Federal portion of the HST and the Provincial portion.
ie: $340,000 Purchase Price
Federal Portion Tax (5%) = $17,000
Provincial Portion Tax (7%) = $23,800
Rebates:
Federal Portion Rebate = $6,120
Provincial Portion Rebate = $17,000.01
Purchase Price $340,000 + $40,800 (Full Tax) = $380,800 - $23,120.01 (Rebates) =
$357,679.99 (Total Purchase Price)
2. When purchasing a NEW property between $350K-450K the Federal Portion rebate declines to $0 at 450K but you still receive the maximum Provincial Portion rebate.
ie:$420,000 Purchase Price
Federal Portion Tax (5%) = $21,000
Provincial Portion Tax (7%) = $29,400
Rebates:
Federal Portion Rebate = $1,890
Provincial Portion Rebate = $21,000.01
Purchase Price $420,000 + $50,400 (Full Tax) = $470,400 - $22,890.01 (Rebates) =
$447,509.99 (Total Purchase Price)
3. When purchasing a NEW property between 450K-525K there is no longer any Federal Portion rebate and the Provincial portion rebate will maximize at $26,250 at 525K.
ie: $510,000 Purchase Price
Federal Portion Tax (5%) = $25,500
Provincial Portion Tax (7%) = $35,700
Federal Portion Rebate = $0
Provincial Portion Rebate = $25,500.01
Purchase Price $510,000 + $61,200 (Full Tax) = 571,200 - $25,500.01 (Rebates) =
$545,699.99 (Total Purchase Price)
4. Finally any new purchase above 525K the only rebate is $26,250.
ie: Purchase Price $600,000
Federal Portion Tax (5%) = $30,000
Provincial Portion Tax (7%) = $42,000
Federal Portion Rebate = $0
Provincial Portion Rebate = $26,250
Purchase Price $600,000 + $72,000 (Full Tax) = $672,000 - $26,250 (Rebate) =
$645,750 (Total Purchase Price)

I wish there was an easier way to explain how this all works but I hope these examples shed some light on the subject.

Kyle Hislop
RE/MAX

iPad and Real Estate

www.KyleHislop.com

Apple's iPad will be a perfect addition to any Real Estate agents daily routine. First, the ability to sign documents on the screen instead of having to print off endless contracts will make the profession even more mobile. Especially with apps like Zosh that make signing on the iPad or iPhone so easy. Right now I usually carry a briefcase full of contracts which has to be updated on a daily basis so not to be caught without the right paperwork at the right time. Second, I can download the listings I'm going to show to the iPad instead of, again, wasting paper by printing a copy for myself and my clients. Also it's an endless doodle pad if I have to sketch some design ideas on the go. I'm a little disappointed that it doesn't tether like my MacBook Pro but I guess that's solved by jailbreaking.
I could type forever on the many uses an iPad will have for the Real Estate profession. At the end of the day, it will save time, money and for that environmentalist in you...save trees!

Kyle Hislop
RE/MAX

Slow July for real estate - Chilliwack - by Kyle Hislop

Wow...what a slow July!!! We only had 144 sales in July...we haven't seen it this slow since 2000. No need to panic, should pick up in the fall. A lot of things could be contributing to the slow market. Warm summer, new mortgage rules, higher interest rates and HST. If you are looking to buy a home now is a great time. There is tons of listings on the books, sellers are motivated and there is little chance of getting into a multiple offer situation. Again, sellers: no need to panic however, need to price your home well, and make sure it shows great. There is lots of competition and many buyers make their decision on first impressions.
As always, if you have an real estate questions...don't hesitate to give me a call, 604-795-1616 or drop me an email, kylehislop@gmail.com

Kyle Hislop
RE/MAX