July 1, 2010 is fast approaching but there is still time to save before the harmonized sales tax (HST) comes into effect, especially with the purchase of new real estate at Sayward Hill. Here is a quick snapshot of what the new tax is all about and how you can save almost $23,000 if you act before July 1st.
The HST combines the five per cent federal goods and services tax (GST) and the seven per cent provincial sales tax (PST). The GST and PST will be eliminated. With the HST, some things will likely cost more. For example, goods that are now exempt from the PST will have the HST added on; for those items, consumers will pay a 12 per cent tax, instead of 5 per cent for just the GST.
Examples of items that will have a higher cost because of the HST:
- restaurant meals
- private sales of vehicles, boats and aircraft
Taxes reduced as a result of the HST:
- Provincial portion of the HST on accommodation reduced to seven per cent from eight per cent
- Provincial portion of the HST on liquor reduced in restaurants to seven per cent from 10 per cent
Measures to offset increased costs to some industries:
- Point-of-sale rebates for the seven per cent portion of the HST on books, motor fuels, children’s clothing and footwear, children’s car seats, children’s diapers, feminine hygiene products
- Provincial rebate and credit for the provincial portion of the HST payable on energy purchased for residential use
- Purchasers of new houses costing up to $525,000 will be eligible to receive a rebate of 71.43 per cent of the provincial portion of the HST, up to a maximum of $26,250. Houses over $525,000 will receive a flat rebate of $26,250, but the buyer pays the higher rate on the balance.
We have calculated how you can save almost $23,000 based on the new HST tax formulas:
When a sale of one of the remaining new condos at 758 Sayward Hill Terrace takes place after July 1st, Jawl Developments, as the Builder/Developer has the ability to claim back the embedded PST that was otherwise incurred during construction of the building which would otherwise not be paid back through the HST. The BC Government estimates this amount at 2% of the consideration paid, estimated as follows:
$1,029,000 price including GST
$ 49,000 5% GST
$ 980,000 Consideration paid $980,000 x 2% Builder’s Rebate = $19,600
We estimate the Builder’s Rebate amount of $19,600 which we can reduce the purchase price by and claim back from the government. In this scenario, with a contract signed after July 1st, a buyer would be subject to HST, so the new calculation of the purchase price is as follows:
$ 980,000 Consideration
$+ 117,600 12% HST Paid
$- 26,250 BC New Housing Rebate (maximum rebate)
$- 19,600 Less Builder’s PST 2% Rebate
$1,051,750 TOTAL PURCHASE PRICE after July 1, 2010
$1,029,000 TOTAL PURCHASE PRICE on June 30, 2010
$ 22,750 TOTAL SAVINGS
In summary, a savings of $22,750 is available if a purchase is made before July 1st, 2010. For more information on the remaining, 3 brand-new residences at 758 Sayward Hill Terrace,please contact Ingrid Jarisz of our Sales Office at 250-658-4700 x1 or email to firstname.lastname@example.org .