British Columbia transition tax on new housing and transition tax rebate

As of April 1, 2013, the HST at the rate of 12% no longer applies in British Columbia. The HST has been replaced by the GST at the rate of 5% and a provincial sales tax.

The GST at 5% applies to new housing, or an interest in new housing in British Columbia, where the tax on the sale or self-supply became payable after March 2013. In addition to the GST, the builder may have to account for the British Columbia transition tax.

British Columbia transition tax

The British Columbia transition tax generally applies to the sale of housing, or of an interest in housing, or a self-supply of housing if:

• the construction or substantial renovation is at least 10% complete before April 2013; and
• the GST in respect of the sale or self-supply becomes payable on or after April 1, 2013 and before April 2015.

The British Columbia transition tax is generally calculated at 2% of the consideration payable for the sale or, in the case of a self-supply, 2% of the fair market value of the housing.

In the case of a grandparented taxable sale (that is, where a written agreement of purchase and sale for the housing was entered into before November 19, 2009), the total amount payable by the purchaser for the sale is deemed to include the British Columbia transition tax.

British Columbia transition tax rebate

Generally, the British Columbia transition tax rebate is available where:

• the British Columbia transition tax applies to the builder's sale of new housing or of an interest in the new housing, or to the builder's self-supply of new housing;
• the PST has been paid on 90% or more of the PST-taxable materials incorporated into the housing after March 2013;
• the British Columbia transition tax has been reported and remitted; and
• the percentage of completion of the construction or substantial renovation of the housing immediately before April 1, 2013, is not more than 90%.

The British Columbia transition tax rebate is not available for the sale of new housing, or the sale of an interest in new housing, made by a person who is not the builder of the housing.

The British Columbia transition tax rebate is also not available for the sale of a new mobile home or a new floating home.

The builder's application for the British Columbia transition tax rebate must be filed no later than two years after the due date of the builder's GST/HST return for the reporting period in which the British Columbia transition tax became payable on the sale or self-supply.

The builder can offset the British Columbia transition tax rebate against the British Columbia transition tax that must be reported on the builder's GST/HST return and remit the net amount owing on the return, provided the rebate application form is filed at the same time as the return.

An agent of the builder can report and remit the British Columbia transition tax and apply for the rebate on the builder’s behalf. In that case, the form must be filed no later than two years after the due date for the agent's GST/HST return for the reporting period in which the British Columbia transition tax becomes payable.

Forms and publications

• GST/HST NOTICE276, Elimination of the HST in British Columbia in 2013 - Transitional Rules for Real Property Including New Housing
• GST/HST Info sheet GI-156, Elimination of the Harmonized Sales Tax in British Columbia: British Columbia Transition Tax on New Housing
• GST/HST Info sheet GI-157, Elimination of the Harmonized Sales Tax in British Columbia: British Columbia Transition Rebate for Builders of New Housing
• Form RC7004-BC, British Columbia Transition Tax Rebate

Date modified:

2014-11-07