Tax memo: Returning to B.C.’s Provincial Sales Tax: Transitional rules for new housing

Memo No. 2012-51

This Tax memo updates our February 19, 2012, Tax memo “Returning to B.C.’s Provincial Sales Tax: Transitional rules for new housing” to reflect November 2012 announcements.

Purchasers, vendors and builders could be affected significantly by the expanded information requirements.

On February 17, 2012, British Columbia announced, in HST Notice#12, transitional rules to mitigate potential double taxation on new housing, because of the return to the 7% Provincial Sales Tax (PST) on April 1, 2013. The transitional rules stem from the August 26, 2011 provincial referendum, which caused British Columbia to commit to revoke the Harmonized Sales Tax (HST) and reinstate its PST. They await legislative approval.

The key changes announced in November 2012 are described in more detail in our Tax memo. They expand the information requirements that a Canadian builder and foreign supplier must provide in:

  • the purchase and sale agreement;
  • an addendum to an agreement; and
  • a statement of adjustment or other document.

These changes are effective December 1, 2012.

The following documents contain numerous complex disclosure requirements with which the vendor must comply:

  • British Columbia’s New Housing Transition Tax and Rebate Act and a related regulation, which contain the changes; and
  • the revised GST/HST Notice No. 276 – Elimination of the HST in British Columbia in 2013 – Transitional Rules for Real Property Including New Housing (November 2012), released by the Canada Revenue Agency (CRA), which provides details of the specific information requirements that are included in the regulation.