If you’re on the hunt for a property in South Surrey or Langley, and you need expert guidance, look no further! As a top realtor in the area, I’m here to assist you every step of the way. Let’s delve into the essentials of purchasing a home in British Columbia (BC), covering GST, PTT, rebates, and exemptions.
Understanding GST on Real Estate in BC
When you’re gearing up to purchase a property, it’s crucial to comprehend the costs involved to avoid any last-minute surprises. Let’s demystify the Goods and Services Tax (GST) on real estate transactions in British Columbia. The GST is a 5% federal tax payable upon completion for the sale of brand-new properties in the province.
When Does GST Apply to a Home Purchase?
GST typically applies to various real estate scenarios, including:
- Presale Purchases (like condos or townhomes)
- New Construction Homes
- Assignment of Contracts for New Homes
- Substantially Renovated Residential Properties
- New Mobile and Floating Homes
- Sale of Vacant Land
However, if your purchase is a primary residence under $750,000, GST does not apply.
Who Pays GST in Real Estate Transactions?
In most cases, buyers are responsible for paying GST on newly constructed homes. Sellers or developers generally do not cover GST on new properties. However, when it comes to assignment contracts, the assignee (new buyer) shoulders the GST responsibility.
GST Due and Payable
GST becomes due at the time of completion, as specified in the purchase and sale contract. Your legal representative will calculate this during the preparation of the statement of adjustments.
GST Rebates for New Home Purchases
There are two key GST rebates for new home buyers:
- GST New Housing Rebate (Full or Partial)
- GST New Residential Rental Rebate
The full GST New Housing Rebate equals 36% of the 5% GST. It applies to homes under $350,000 intended for primary residence. Partial rebates apply to homes between $350,000 and $450,000, gradually reducing based on purchase price.
For those planning to rent out their new property, the GST New Residential Rental Rebate offers additional relief, subject to specific conditions.
In summary, understanding the ins and outs of GST, rebates, and exemptions is vital when navigating the BC real estate market. As you embark on your homebuying journey, ensure clarity on all associated costs and benefits. Feel free to reach out for expert guidance tailored to your needs.
Written by Jared Gibbons, Top South Surrey / Langley Realtor
If you’re looking for a realtor to help you purchase a property, call me today!