Returning to the GST and PST

On April 1, 2013, the Harmonized Sales Tax (HST) will be replaced by the federal Goods and Services Tax (GST) and the BC Provincial Sales Tax (PST).


When does HST apply, and when does GST apply?

The 12% HST applies if the seller transfers either possession or ownership of a new home to the buyer before April 1, 2013.


The 5% GST applies if the seller transfers both possession and ownership of a new home on, or after, April 1, 2013.

The PST and real estate commissions

The return to the PST will affect the taxes REALTORS® charge on their services.

• If a commission or fee is payable before April 1, 2013, the 12% HST applies.


• If a commission or fee is payable on or after April 1, 2013,then the 5% GST applies.


When does the commission become payable?

The standard Multiple Listing Contract provides that a commission is payable on the earlier of the following:

• completion date under the Contract of Purchase and Sale, or

• the actual date that the sale completes.

What about the 2% Transition Tax?

The 2% BC Transition Tax will apply to the sale of new residential homes if ownership and possession take place on or after April 1, 2013 and the construction or substantial renovation of the new home is 10% or more complete as of April 1, 2013.

The 2% tax ceseases to apply if ownership and possession are on or after April 1, 2015. The 2% reflects an embedded PST builders pay on materials (construction inputs). Under the HST, builders can write off that embedded 2%, but they cannot under the GST.