Ginger Chao
604-889-8951

Buyer's Guide / Seller's Guide » GST Rebate For Purchasers of New Residential Property

GOODS AND SERVICES TAX REBATE FOR PURCHASERS OF NEW RESIDENTIAL PROPERTY

Goods and Services Tax ("G.S.T.") is payable on the purchase of a new home.  The G.S.T. is equal to 6%, however, a rebate is available in certain cases.

For homes with a fair market value of under $350,000.00, a rebate is available of 36% of the G.S.T. For example, if the fair market value is $300,000.00, the gross G.S.T. would be $18,000.00 (6% of $300,000.00).  The rebate would then be $6,480.00 (36% of $18,000.00).  Thus the net G.S.T. would be $11,520.00 ($18,000.00 less $6,480.00).

For homes with a fair market value of $450,000.00 or more, no rebate is available.  G.S.T. in the amount of 6% is payable on the entire purchase price.

For homes valued between $350,000.00 and $450,000.00, the rebate is gradually reduced and is calculated by using the following formula:

A X ($450,000.00 - B) / $100,000.00

"A" is the lower of $8,750.00 or 36% of the G.S.T. and "B" is the greater of $350,000.00 or the fair market value of the home.  For example, assume the value of the home is $400,000.00.  The rebate would equal:

$7,560.00 X ($450,000.00 - $400,000.00) / $100,000.00 = $3,780.00

Using this example, the G.S.T. payable would be $24,000.00 (6% of $400,000.00) less $3,780.00 which would equal $20,220.00.

Note that this rebate is only available to individuals and a company is not eligible for this rebate.

Please remember that the rules regarding G.S.T. may be changed at any time by the federal government. The information above is accurate as of the date of writing but please review the government website or discuss your situation with your accountant to ensure the proper amount of taxes are being paid. If you do not have an accountant, we would be happy to refer you to our partners, Newport Group of Chartered Accountants, part of Bell Spagnuolo Professional Services.

The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult a lawyer for individual advice regarding your own situation.

Copyright © 2003 by Bell Spagnuolo Legal Offices. All rights reserved. You may reproduce materials available at this site for your own personal use and for non-commercial distribution. All copies must include this copyright statement.

 

   

Ginger Chao - Coldwell Banker Westburn Realty
5489 Kingsway, Burnaby, BC V5H 2G1
Business: 604-437-1123 Fax: 604-437-9077

This site provides real estate information, listings and tools servicing the Greater Vancouver and Fraser Valley Areas of British Columbia (BC) Canada. Areas serviced include Vancouver, West Vancouver, North Vancouver, Burnaby, Richmond, New Westminster, Coquitlam, Port Coquitlam, Port Moody, Maple Ridge, Pitt Meadows, Surrey, Whiterock, Delta, Tsawwassen, Ladner, North Delta, Langley, Abbotsford, Chilliwack and Mission. As some of these areas are outside of my core service area, We provide a free referal service so that consumers can have confidence that they will be working with a trusted and competent REALTOR®in the area they are selling or buying in.

We can assist repeat home buyers & sellers, first time buyers, investors looking for single or multiple unit investment properties, building lots, and new construction project purchases.