The provincial government has announced that it intends to combine the eight
percent Provincial Sales Tax with the five percent federal Goods and
Services Tax, creating a 13 percent Harmonized Sales Tax (HST). * The HST is NOT YET IN EFFECT. The provincial government has
indicated that it intends to bring the HST into effect beginning on July 1,
2010; however, note transition rules below. * HST will not apply on the purchase price of re-sale homes. * HST would apply to services such as moving cost, legal fees, home
inspection fees, and commissions. * HST will apply to the purchase price of newly constructed homes.
However, the Province is proposing a rebate so that new homes across all
price ranges would receive a 75 per cent rebate of the provincial portion of
the single sales tax on the first $400,000. For new homes under $400,000,
this would mean, on average, no additional tax amount compared to the
current system.
Transitional Rules for New Housing * Generally, sales of new homes under written agreements of purchase
and sale entered into on or before June 18, 2009 would not be subject to the
provincial portion of the single sales tax, even if both ownership and
possession are transferred on or after July 1, 2010. * The tax would also not apply to sales of new homes under written
agreements of purchase and sale entered into after June 18, 2009 where
ownership or possession is transferred before July 1, 2010.
Additional Transitional Rules * Where services straddle the HST implementation date of July 1, 2010,
the tax charged for the service may have to be split between the pre-July
2010 and post-June 2010 periods. However, the HST will generally not apply
to a service if all or substantially all (90% or more) of the service is
performed before July 2010. * Four key timelines are important (see below). All are based on the
earlier of the time the consideration is either due (In general, an amount
is due on the date of the invoice or the day required to be paid pursuant to
a written agreement), or is paid without having become due. If consideration
is due or paid, * Before October 15, 2009, HST will generally not apply (however, see
above transition rules for new housing). * From October 15, 2009 to April 30, 2010, certain business that are
not entitled to recover all of their GST/HST paid as input tax credit may be
required to self-assess the provincial component of the HST with respect to
goods or services supplied after June 30, 2010. * From May 1, 2010 to June 30, 2010, HST will generally apply for
services supplied after June 30, 2010. * After June 30, 2010, HST will generally apply. An exception to this
rule would be where ownership of the property is transferred before July
2010 or the invoice relates to services provided before July 2010. * With regard to the lease or license of goods, including
non-residential real property, HST will generally apply to lease intervals
or payment periods on or after July 1, 2010 and the general rules noted
above will apply. However, where a lease interval begins before July 2010
and ends before July 31, 2010, it is not subject to HST. * With regard to the sale of non-residential property, HST is due
where both possession and ownership of non-residential property occurs on or
after July 1, 2010. Asif Khan, Realtor