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As well, it's a progressive tax. If you purchase a home valued over $850,000 you can still get the rebate up to that amount.
In addition to new home sales, there are also rule changes for lot sales, second homes and rental properties that will go into effect.
One development that expects to benefit from the transition rules is Cheakamus Crossing, where 10 market homes at River Bend are still for sale, as well as several private lots. Lowering the threshold makes all of those homes eligible for the full rebate said Rob Palm at Whistler Real Estate Co., which is handling the sale.
"Moving the threshold from a maximum of $26,250 to $42,500 is fantastic, so people buying a principal residence (at River Bend) will be able to get about a $32,000 rebate on their taxes," said Palm.
"But the amazing thing is that for anyone buying a property as a second home the government has basically given us the $32,000 price reduction without having to lift a finger, because people that previously didn't qualify are now able to get a rebate. That's huge for us at Cheakamus Crossing and River Bend especially, and it's also big for any other projects — Fitzsimmons Walk, Rainbow."
Palm said the transition rules also create opportunities in rental housing, or "anything that's considered a commercial property and doing nightly rentals."
Those owners can defer paying HST on the purchase price (although they still pay HST on rentals), or can get the rebate if they decide to take the unit out of the rental pool and make it their primary residence.
Palm said it's hard to say how the HST uncertainty impacted business, but knows some people were sitting on the fence before making buying decisions.
"What this does, if you look at a property on the open market that's listed for the same money, all of a sudden you can come buy at River Bend for five per cent less... which is a pretty good inducement."
The Canadian Home Builders Association — Sea to Sky has endorsed the province's approach, both in terms of new home sales and the expansion of the rebate to second homeowners.
"Second homes ownership is very important to the Whistler market in particular and this should create a stimulus for builders in the area," wrote Eric Prall, present of the CHBA-S2S and Glacier Creek Contracting.
According to the release from the Finance Ministry:
• B.C. portion of the HST will continue to apply until April 1, 2013. Purchasers will be eligible for the new B.C. HST new housing rebate, up to $42,500, and builders will continue to claim input tax credits.