Transitional tax adjustment for builders in British Columbia

As of April 1, 2013, the HST has been replaced by the GST at the rate of 5% and a provincial sales tax in British Columbia. The HST applied from July 1, 2010 until March 31, 2013.

Builders have to account for a transitional tax adjustment for a grandparented sale of certain types of newly constructed or a substantially renovated housing that was less than 90% complete as of July 1, 2010, where the tax became payable on the sale before April 1, 2013. Where the tax became payable on or after April 1, 2013, builders have to account for the British Columbia transition tax instead.

The transitional tax adjustment is up to 2% of the sale price for a detached house, semi-detached house, or attached house. The amount of the transitional tax adjustment for this type of housing is based on the degree of completion as of July 1, 2010.

The transitional tax adjustment is 2% of the sale price for a residential condominium unit or condominium complex where the housing was at least 10% complete as of July 1, 2010.

The transitional tax adjustment does not apply to sales of traditional apartment buildings, duplexes, mobile homes, and floating homes.

If you are a builder that has to account for the transitional tax adjustment, include the amount of the adjustment in your net tax calculation on your GST/HST return for the reporting period that includes the date possession of the housing is transferred to the purchaser under the written agreement of purchase and sale.

Forms and publications

• GST/HST NOTICE246, Harmonized Sales Tax for British Columbia - Questions and Answers on Housing Rebates and Transitional Rules for Housing and Other Real Property Situated in British Columbia
• GST/HST Info Sheet GI-095, Harmonized Sales Tax: Information on the Transitional Tax Adjustment for Builders of Housing in Ontario and British Columbia
• GST/HST Info Sheet GI-105, How to Determine the Percentage of Completion for Purposes of the Provincial Transitional New Housing Rebates and the Transitional Tax Adjustment in Ontario and British Columbia

Date modified:

2014-11-07