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Homebuilders, sellers welcome HST transition rules

Higher threshold, new rules expected to boost housing industry

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• B.C.'s portion of the HST will no longer apply to newly built homes where construction begins on or after April 1 2013. Builders will once again pay seven per cent PST on their building materials. On average, about two per cent of the home's final price will again be embedded PST.

• For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price. This ensures equitable treatment among purchasers and will help mitigate distortive market behaviour. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double taxation on homebuyers.

The changes are still subject to the approval of the legislature.