What is the Harmonized Sales Tax (HST)?

On July 23, 2009, Premier Gordon Campbell and Finance Minister Colin Hansen announced that, effective July 1, 2010, BC will adopt a Harmonized Sales Tax (HST), combining the 7% Provincial Sales Tax with the 5% federal Goods and Services Tax for a single sales tax rate of 12%. The federal government will provide BC with $1.6 billion in transitional funding.

For consumers, goods and services (with some exceptions) will be subject to the HST in the same manner as they are currently subject to GST. Therefore, all items on which GST is not payable, such as basic groceries, prescription drugs and medical devices, would also not be subject to the HST.

How will the HST impact the real estate sector?

As proposed, the HST will increase the cost of buying or selling all types of property and becomes essentially an additional tax on home ownership. REALTOR® commissions, appraisals and other services will be subject to a 12% HST, replacing the 5% GST now charged, and new homes will be subject to the full HST.

The HST would generally apply to a supply of a service to the extent that the service is performed on or after July 1, 2010. The HST would generally not apply, however, to a supply of a service if all or substantially all (90% or more) of the service is performed before July 2010.

How many other provinces have an HST?

Four: Newfoundland and Labrador, Nova Scotia and New Brunswick (1997) and Quebec (1992, Quebec Sales Tax, which doesn’t fully harmonize the GST with provincial tax). In early 2009, the Ontario government announced its intention to implement an HST on July 1, 2010.

For more information on HST, please click here.

BCREA HST Information

HST Information for Buyers