What Does Net HST Included Mean?
Here’s a question from a reader of the blog:
I saw on a listing for a new house “Net HST Included.” What does this mean?
New homes in British Columbia are subject to the HST of 12%. However, to lessen the impact, there is also a rebate from the Provincial government on a sliding scale, depending on the price of the house. The impact is that you never pay 12% HST on the purchase of your new home. Embedded below is a spreadsheet of the actual amount payable.
This is where the “net” HST comes in. The developer/seller will often include the HST payable, less the rebate, in the purchase price. This way, the price you see is the price you pay and the developer will pay the HST out of his pocket. In turn, usually there is a clause in the contract to the effect that you will assign your rebate to the developer to offset his costs.
This is an important implication – you must be eligible for a rebate in order to assign it to the builder. Most types of new housing are eligible in our local marketplace – houses, townhouses and condos all qualify. And, whether you’re buying the new home to occupy it, or as a rental, the rebate still applies.
Here is a handy tax calculator from the BC Real Estate Association which also considers the Property Transfer Tax (PTT).
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