Buying A Pre Sale
When you buy a newly constructed home, condominium or townhouse, the entire purchase price including land is taxable.
If the property is to be rented to tenants, the full 7% GST is charged on the purchase price. However, if the home is going to be your primary place of residence, it may qualify for a partial GST rebate, depending upon the sale price. For primary residences costing $350,000 or less, you will receive a rebate of 36% of the GST paid, to a maximum of $8,750. That means you pay approximately 4.5% GST (not 7%) on the purchase price.
You buy a new home for $200,000. The 7% GST is $14,000, less a 36% rebate of $5,040. So, you pay $8,960 in GST. The maximum rebate is $8,750.
The rebate for new homes costing between $350,000 and $450,000 declines to zero on a proportional basis.
Here is how it works. For each $1,000 of purchase price above $350,000 the maximum rebate of $8,750 is reduced by 1% Therefore if your purchase price is $370,000 you are $20,000 over and must reduce the maximum rebate by 20%.
As such the maximum rebate of $8,750 reduced by 20% equals $7,000. For a home priced at $370,000 the GST payable, at 7%, is $25,900. The adjusted maximum rebate is $7,000 so the GST payable is $18,900.
Adjusting the maximum rebate continues until the rebate is reduced by 100%, there is no rebate, which occurs at homes priced at or above $450,000. New homes selling for $450,000 or more do not qualify for a GST rebate.
Phone: Nels Agerbo (604) 767-9534 Email: firstname.lastname@example.org, email@example.com