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# British Columbia - Provincial

## corporation tax and HST

Dayarayan
Management & Consulting Services –
LTD
112 West.12th.Street.North Vancouver British Columbia V7M1N3 Canada

Tel: 1604-986-3704

Fax: 1604-960-1216

## Web: www.dayarayan.ca Email: info@dayarayan.com

What are the income tax rates in Canada for
2010?
These are the rates that an individual will use when completing their 2010

income tax and benefit return. The information may change during the year to

reflect updates to the law. Federal tax rates for 2010 are:

## • 15% on the first \$40,970 of taxable income, +

• 22% on the next \$40,971 of taxable income (on the portion of taxable
income between \$40,970 and \$81,941), +
• 26% on the next \$45,080 of taxable income (on the portion of taxable
income between \$81,941 and \$127,021), +
• 29% of taxable income over \$127,021.

The chart below reproduces the first calculation that has to be made on Page 2
of Schedule 1 of the tax package to calculate net federal tax. Page 1 is used to
calculate federal non-refundable tax credits.

## Federal tax on taxable income manual calculation chart 2010

Use this
column if Use this column if your Use this column if your Use this column if
your taxable taxable income is more taxable income is more your taxable income
income is than \$40,970, but not than \$81,941, but not is more
\$40,970 or more than \$81,941 more than \$127,021 than \$127,021
less
1
from line 260 of your return
Base amount − 0 − 40,971 − 86,051 − 127,021 2
Line 1 minus line 2 (this
= = = = 3
amount cannot be negative)
Federal tax rate × 15% × 22% × 26% × 29% 4
Multiply the amount on line
= = = = 5
3 by the tax rate on line 4
Tax on the amount from
+ 0 + 6,109 + 15,069 + 26,720 6
line 2
Add lines 5 and 6 = = = = 7

2
Provincial/Territorial tax rates for 2010
Under the current tax on income method, tax for all provinces (except Quebec)
and territories is calculated the same way as federal tax.
Form 428 is used to calculate this provincial or territorial tax. Provincial or
territorial specific non-refundable tax credits are also calculated on Form 428.
For complete details, see the Provincial or Territorial information and forms in

## Provincial / Territorial tax rates (combined chart) 2010

Provinces / Territories Rate(s)
Newfoundland and Labrador 7.7% on the first \$31,061 of taxable income, +
12.8% on the next \$31,060, +
15.5% on the amount over \$62,121
Prince Edward Island 9.8% on the first \$31,984 of taxable income, +
13.8% on the next \$31,985, +
16.7% on the amount over \$63,969
Nova Scotia 8.79% on the first \$29,590 of taxable income, +
14.95% on the next \$29,590, +
16.67% on the next \$33,820 +
17.5% on the amount over \$93,000
New Brunswick 10.12% on the first \$35,707 of taxable income, +
15.48% on the next \$35,708, +
16.8% on the next \$44,690, +
17.95% on the amount over \$116,105
Quebec Contact Revenue Québec
Ontario 6.05% on the first \$36,848 of taxable income, +
9.15% on the next \$36,850, +
11.16% on the amount over \$73,698
Manitoba 10.8% on the first \$31,000 of taxable income, +
12.75% on the next \$36,000, +
17.4% on the amount over \$67,000
Saskatchewan 11% on the first \$40,113 of taxable income, +
13% on the next \$74,497, +
15% on the amount over \$114,610
Alberta 10% of taxable income
British Columbia 5.06% on the first \$35,716 of taxable income, +
7.7% on the next \$35,717, +
10.5% on the next \$10,581, +
12.29% on the next \$17,574, +
14.7% on the amount over \$99,588
Yukon 7.04% on the first \$38,832 of taxable income, +
9.68% on the next \$38,832, +
11.44% on the next \$48,600, +
12.76% on the amount over \$126,264
Northwest Territories 5.9% on the first \$36,885 of taxable income, +
8.6% on the next \$36,887, +
12.2% on the next \$46,164, +
14.05% on the amount over \$119,936
Nunavut 4% on the first \$38,832 of taxable income, +
7% on the next \$38,832, +
9% on the next \$48,600, +
11.5% on the amount over \$126,264

3
British Columbia - Provincial
corporation tax
Lower rate
The lower rate of British Columbia income tax is 2.5% effective
December 1, 2008. The lower rate was 3.5% effective July 1,
2008 and before this date it was 4.5%.
The income eligible for the lower rate is determined using the
will be increased to \$500,000 effective January 1, 2010.

Higher rate
The higher rate of British Columbia income tax is 11% effective
July 1, 2008. Before this date it was 12%. The higher rate will
decrease to;
• 10.5% effective January 1, 2010; and to
• 10% effective January 1, 2011.
The higher rate applies to all income not eligible for the lower
rate.
When the rate or the business limit changes during the tax
year, you have to base your calculation on the number of days
in the year that each rate or limit is in effect.

## Reporting the tax

You can use Schedule 427, British Columbia Corporation Tax
before the application of credits. You do not have to file it with
the return. See the schedule for more details.

Generally, provinces and territories have two rates of income tax: the lower rate
and the higher rate.
The lower rate applies to either:
• the income eligible for the federal small business deduction; or

4
• the income based on limits established by the particular province or
territory.
The higher rate applies to all other income
Corporation X earned all of its income for 2009 from its
permanent establishment in Newfoundland and Labrador.
Corporation X claimed the small business deduction when it
calculated its federal tax payable. The income from active
The Newfoundland and Labrador lower rate of tax is 5%. The higher rate of
tax is 14%.

## See example 1. Corporation X calculates its Newfoundland and Labrador tax

payable as follows:

## Taxable income \$90,000

Subtract amount taxed at lower rate: \$78,000
Least of lines 400, 405, 410, or 425 of the return, in the small business
deduction calculation
Amount taxed at higher rate \$12,000
Taxes payable at the lower rate: \$ 3,900
\$78,000 × 5% =
Taxes payable at the higher rate: \$ 1,680
\$12,000 × 14% =
Newfoundland and Labrador tax payable \$ 5,580

When you allocate taxable income to more than one province or territory,
you also have to allocate proportionally any income eligible for the small

## See example 2. Corporation Y has permanent establishments in both Nova

Scotia and the Yukon. Its tax year runs from September 1, 2008, to
August 31, 2009. Corporation Y claimed the small business deduction when it
calculated its federal tax payable. The lower rate of tax for Nova Scotia is 5%,
and the higher rate of tax is 16%.To calculate its Nova Scotia income tax,
Corporation Y does the following calculations:

## Taxable income allocated to Nova Scotia \$60,000

(from Schedule 5)
Taxable income allocated to the Yukon \$30,000
(from Schedule 5)
Total taxable income earned in Canada \$90,000
Least of lines 400, 405, 410, or 425 of the return, in the small \$78,000
Income eligible for the small business deduction attributed to Nova \$52,000
Scotia:

5
(\$60,000 ÷ \$90,000) × \$78,000 =
Taxable income earned in Nova Scotia \$60,000
Subtract: Income eligible for the small business deduction attributed \$52,000
to Nova Scotia
Amount taxed at higher rate \$ 8,000
Taxes payable at higher rate: \$ 1,280
\$8,000 × 16% =
Taxes payable at lower rate: \$ 2,600
\$52,000 × 5% =
Nova Scotia tax payable \$ 3,880

To calculate its Yukon income tax payable, Corporation Y would repeat the
same steps, using the rates that apply.

## Corporation tax rates

Federal rates
The basic rate of Part I tax is 38% of your taxable income,
28% after federal tax abatement.
For Canadian-controlled private corporations claiming the small
business deduction, the net tax rate before surtax* is:
• 12% before January 1, 2008
• 11% effective January 1, 2008
For the other corporations, the net tax rate before surtax* will
decrease as follows:
• 21% before January 1, 2008
• 19.5% effective January 1, 2008
• 19% effective January 1, 2009
• 18% effective January 1, 2010
• 16.5% effective January 1, 2011
• 15% effective January 1, 2012
*The corporate surtax is zero, effective January 1, 2008.
Provincial or territorial rates
Generally, provinces and territories have two rates of income
tax - a lower rate and a higher rate.
Lower rate
The lower rate applies to either:
• the income eligible for the federal small business deduction; or
• the income based on limits established by the particular province or
territory.
Higher rate
The higher rate applies to all other taxable income.

6
Provincial and territorial tax rates (except Quebec and
Alberta)
The following table shows the income tax rates for provinces
and territories (except Quebec and Alberta, which do not have
corporation tax collection agreements with the CRA).
These rates are in effect on January 1, 2010, and some
might change during 2010.

## Province or territory Lower rate Higher rate

Nova Scotia 5% 16%
Prince Edward Island 2.1% 16%
New Brunswick 5% 12%
Ontario 5.5% 14%
Manitoba 1% 12%
British Columbia 2.5% 10.5%
Yukon 4% 15%
Northwest Territories 4% 11.5%
Nunavut 4% 12%

For a table that shows the income tax rates as of January 1, 2010, for the
provinces and territories that have corporate tax collection agreements with the
federal government.

## Tax Brackets Rate (%) Provincial Surtax

Federal (note) \$10,382 to \$40,970 15.00
\$40,970 to \$81,941 22.00
\$81,941 to \$127,021 26.00
\$127,021 and higher 29.00
British Columbia \$11,000 to \$35,859 5.06
\$35,859 to \$71,719 7.70
\$71,719 to \$82,342 10.50
\$82,342 to \$99,987 12.29
\$99,987 and higher 14.70

7
British Columbia (BC) combined federal & provincial tax rates / 2004-2010
Marginal Tax Rates
Capital Gains Other Income
2004 2005 2006 2007 2008 2009 2010 2004- 2008- 2004- 2004- 2004- 2008-
2006 2007 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 2006 2007
2005 2010 2005 2005 2005 2010
first first first first first first first
\$32,476 \$33,061 \$33,755 \$34,397 \$35,016 \$35,716 \$35,859 11.03% 10.65% 10.35% 10.03% 4.52% 3.58% 2.83% 2.03% 3.16% 4.16% 4.52% (14.02%) (14.89%) (15.81%) (14.36%) (12.59%) 22.05% 21.30% 20.70% 20.06%

## over over over over over over over

\$32,476 \$33,061 \$33,755 \$34,397 \$35,016 \$35,716 \$35,859
up to up to up to up to up to up to up to
\$35,000 \$35,595 \$36,378 \$37,178 \$37,885 \$40,726 \$40,970 12.58% 12.20% 11.83% 11.35% 8.40% 7.46% 6.52% 5.33% 6.46% 7.46% 8.40% (9.52%) (10.61%) (11.99%) (10.54%) (8.79%) 25.15% 24.40% 23.65% 22.70%

## over over over over over over over

\$35,000 \$35,595 \$36,378 \$37,178 \$37,885 \$40,726 \$40,970
up to up to up to up to up to up to up to
\$64,954 \$66,123 \$67,511 \$68,794 \$70,033 \$71,433 \$71,719 15.58% 15.58% 15.33% 14.85% 15.90% 15.90% 15.27% 14.08% 15.21% 16.21% 15.90% 0.27% (0.46%) (1.84%) (0.38%) 1.29% 31.15% 31.15% 30.65% 29.70%

## over over over over over over over

\$64,954 \$66,123 \$67,511 \$68,794 \$70,033 \$71,433 \$71,719
up to up to up to up to up to up to up to
\$70,000 \$71,190 \$72,756 \$74,357 \$75,769 \$81,452 \$81,941 16.85% 16.85% 16.55% 16.25% 19.08% 19.08% 18.33% 17.58% 18.71% 19.71% 19.08% 3.96% 3.10% 2.23% 3.68% 5.32% 33.70% 33.70% 33.10% 32.50%

## over over over over over over over

\$70,000 \$71,190 \$72,756 \$74,357 \$75,769 \$81,452 \$81,941
up to up to up to up to up to up to up to
\$74,575 \$75,917 \$77,511 \$78,984 \$80,406 \$82,014 \$82,342 18.85% 18.85% 18.55% 18.25% 24.08% 24.08% 23.33% 22.58% 23.71% 24.71% 24.08% 9.76% 8.90% 8.03% 9.48% 11.08% 37.70% 37.70% 37.10% 36.50%

## over over over over over over over

\$74,575 \$75,917 \$77,511 \$78,984 \$80,406 \$82,014 \$82,342
up to up to up to up to up to up to up to
\$90,555 \$92,185 \$94,121 \$95,909 \$97,636 \$99,588 \$99,987 19.85% 19.85% 19.50% 19.15% 26.58% 26.58% 25.71% 24.82% 25.95% 26.95% 26.58% 12.67% 11.65% 10.62% 12.07% 13.66% 39.70% 39.70% 39.00% 38.29%

## over over over over over over over

\$90,555 \$92,185 \$94,121 \$95,909 \$97,636 \$99,588 \$99,987
up to up to up to up to up to up to up to
\$113,804 \$115,739 \$118,285 \$120,887 \$123,184 \$126,264 \$127,021 20.35% 20.35% 20.35% 20.35% 27.83% 27.83% 27.83% 27.83% 28.96% 29.96% 27.83% 14.11% 14.11% 14.11% 15.56% 17.13% 40.70% 40.70% 40.70% 40.70%

## over over over over over over over

\$113,804 \$115,739 \$118,285 \$120,887 \$123,184 \$126,264 \$127,021 21.85% 21.85% 21.85% 21.85% 31.58% 31.58% 31.58% 31.58% 32.71% 33.71% 31.58% 18.46% 18.46% 18.46% 19.91% 21.45% 43.70% 43.70% 43.70% 43.70%

## Marginal tax rate for dividends is a % of actual dividends received (not

grossed-up amount).
BC Basic Personal Amount Tax Rate
2004 2005 2006 2007 2008 2009 2010 2004-2006 2007 2008-2010

\$8,523 \$8,676 \$8,858 \$9,027 \$9,189 \$9,373 \$11,000 6.05% 5.70% 5.06%

## Source: Dayarayan centre of tax research

8
Ontario (ON) combined federal & provincial tax rates including surtaxes / 2004-2010
Marginal Tax Rates

## Small Business Dividends Eligible Dividends

Capital Gains Other Income
2004 2005 2006 2007 2008 2009 2010
2004-2009 2010 2004-2005 2006 2007 2008 2009 2010
first \$33,375 first \$34,010 first \$34,758 first \$35,488 first \$36,020 first \$36,848 first \$37,106 2004-05 11.03% 2004-05 4.48% 2004-05 22.05%
2006 10.65% 2006 3.55% 2006 21.30%
3.16% 4.48% (6.04%) (6.69%) (7.13%) (7.71%) (6.23%)
2007-09 10.53% 2007 3.23% 2007-09 21.05%
2010 10.03% 2008-09 3.88% 2010 20.05%
over \$33,375 over \$34,010 over \$34,758 over \$35,488 over \$36,020 over \$36,848 up over \$37,106 up 2004-05 12.58% 2004-05 8.36% 2004-05 25.15%
up to \$35,000 up to \$35,595 up to \$36,378 up to \$37,178 up to \$37,885 to \$40,726 to \$40,970 2006 12.20% 2006 7.42% 7.90% 8.36% (1.55%) (2.2%) (2.63%) (3.21%) (0.32%) 2006 24.40%
2007-10 12.08% 2007-09 7.11% 2007-10 24.15%
over \$35,000 over \$35,595 over \$36,378 over \$37,178 over \$37,885 over \$40,726 up over \$40,970 up
up to \$58,771 up to \$59,880 up to \$61,206 up to \$62,485 up to \$63,428 to \$64,882 to \$65,345
15.58% 15.86% 16.65% 15.86% 8.24% 7.95% 7.52% 6.94% 9.76% 31.15%

over \$58,771 over \$59,880 over \$61,206 over \$62,485 over \$63,428 over \$64,882 up over \$65,345 up
up to \$66,752 up to \$68,020 up to \$69,517 up to \$70,976 up to \$72,041 to \$73,698 to \$74,214
16.49% 16.86% 17.81% 16.86% 9.01% 8.66% 8.14% 7.44% 10.55% 32.98%

over \$66,752 over \$68,020 over \$69,517 over \$70,976 over \$72,041 over \$73,698 up over \$74,214 up
up to \$69,240 up to \$70,560 up to \$72,102 up to \$73,625 up to \$74,720 to \$76,440 to \$76,986
17.70% 19.88% 20.82% 19.88% 12.51% 12.16% 11.64% 10.94% 14.02% 35.39%

over \$69,240 over \$70,560 over \$72,102 over \$73,625 over \$74,720 over \$76,440 up over \$76,986 up
up to \$70,000 up to \$71,190 up to \$72,756 up to \$74,357 up to \$75,769 to \$81,452 to \$81,941
19.70% 22.59% 23.82% 22.59% 14.94% 14.49% 13.81% 12.91% 16.49% 39.41%

over \$70,000 over \$71,190 over \$72,756 over \$74,357 over \$75,769 over \$81,452 up over \$81,941 up
up to \$113,804 up to up to up to up to to \$126,264 to \$127,021
21.70% 27.59% 28.82% 27.59% 20.74% 20.29% 19.61% 18.71% 22.25% 43.41%
\$115,739 \$118,285 \$120,887 \$123,184

over \$113,804 over \$115,739 over \$118,285 over \$120,887 over \$123,184 over \$126,264 over \$127,021
23.20% 31.34% 32.57% 31.34% 25.09% 24.64% 23.96% 23.06% 26.57% 46.41%

Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).
ON Basic Personal Amount Tax Rate
2004 2005 2006 2007 2008 2009 2010 2004-2009 2010
\$8,044 \$8,196 \$8,377 \$8,553 \$8,681 \$8,881 \$8,943 6.05% 5.05%
Source: Dayarayan centre of tax research

9
Federal Income Tax Rates for Income Earned by a Canadian-Controlled Private Corporation
(CCPC) 2008-2011
between \$400,000 and Investment Income
Description \$400,000 Income
\$500,000
2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011 2008 2009 2010 2011
General corporate rate 38.0 38.0 38.0 38.0 - 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0 38.0
Federal abatement (10.0) (10.0) (10.0) (10.0) - (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0)
28.0 28.0 28.0 28.0 - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0
Small business deduction (17.0) (17.0) (17.0) (17.0) - (17.0) (17.0) (17.0) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Rate reduction 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 (8.5) (9.0) (10.0) (11.5) 0.0 0.0 0.0 0.0
Refundable tax 0.0 0.0 0.0 0.0 - 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.7 6.7 6.7 6.7
28.0 28.0 28.0 28.0 - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 34.7 34.7 34.7 34.7

## Comparison of Canada Corporate income tax rates- Federal and BC –(2003-2012)

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
General/M&P/Investment 24.12 22.12 22.12 22.12 22.12 19.50 19.00 18.00 16.50 15.00
Federal(1) Small business 13.12 13.12 13.12 13.12 13.12 11.00 11.00 11.00 11.00 11.00
Investment - CCPC 35.79 35.79 35.79 35.79 35.79 34.67 34.67 34.67 34.67 34.67
General/M&P/Investment 13.50 13.50 13.50/12.00 12.00 12.00 12.00/11.00 11.00 10.50 10.00 10.00
British Columbia(2)
Small business 4.50 4.50 4.50 4.50 4.50 4.50/3.50/2.50 2.50 2.50 2.50 2.50

(1) Federal: The income limit for the purposes of the small business deduction (SBD limit) has been \$300,000 since 2005. The May 2, 2006 federal
budget provided for a rise in the SBD limit to \$400,000 effective January 1, 2007. The January 27, 2009 federal budget provides for an increase in
the SBD limit to \$500,000, effective January 1, 2009. The business limit must be allocated between associated corporations. The SBD is reduced
progressively on a straight-line basis for CCPCs when their taxable capital used in Canada varies between \$10 million and \$15 million.
(2) British Columbia: SBD limit: increased to \$400,000 for taxation years ending after December 31, 2004. As announced in the February 19, 2008
budget, the General/M&P/Investment rate was reduced to 11% effective July 1, 2008, to 10.5% effective January 1, 2010 and to 10% effective
January 1, 2011. In addition, the rate for small businesses was reduced to 3.5% effective July 1, 2008, to 3% effective January 1, 2010 and to 2.5%
effective January 1, 2011. On October 23, 2008, the government brought down its Economic Update which proposed a further decrease in the rate
for small businesses, from 3.5% to 2.5% effective December 1, 2008. The February 17, 2009 budget confirmed the previously announced rate
10
reductions. In a news release dated April 7, 2009, the B. C. government announced that the SBD limit would be increased from \$400,000 to
\$500,000 on January 1, 2010.

Standard deduction
Year Single Filing Filing Dependent Amount if Personal Exemption
Household Widow/Widower age 65 or
Joint Separately Blind
older
\$850 -
2005 \$5,350 \$7,850 \$10,700 \$5,350 \$10,700 \$1,050 \$1,050 \$3,400
\$5,350
\$850 -
2006 \$5,150 \$7,550 \$10,300 \$5,150 \$10,300 \$1,000 \$1,000 \$3,300
\$5,150
\$850 -
2007 \$5,350 \$7,850 \$10,700 \$5,350 \$10,700 \$1,050 \$1,050 \$3,400
\$5,350
\$900 - \$1,050 / \$1,050 /
2008 \$5,450 \$8,000 \$10,900 \$5,450 \$10,900 \$3,500
\$5,450 \$1,350 (1) \$1,350 (1)
\$950 - \$1,100 / \$1,100 /
2009 \$5,700 \$8,350 \$11,400 \$5,700 \$11,400 \$3,650
\$5,700 \$1,400 (2) \$1,400 (2)

(1) \$1,050 (for married filing joint, married filing separately, or qualifying widow); \$1,350 (for single and head of household)
(2) \$1,100 (for married filing joint, married filing separately, or qualifying widow); \$1,400 (for single and head of household)

11
Comparison of Corporate Tax Rates 2003-2009

## Federal British Columbia Top marginal rate

year Investments Capital Other Income
General SBD M&P General/M&P SBD Dividends
(CCPC) Gain
2003 24.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70
2004 22.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70
2005 22.12 13.12 22.12 35.79 13.50 4.50 21.85 31.58 43.70
2006 22.12 13.12 22.12 35.79 12.00 4.50 21.85 - 43.70
2007 22.12 13.12 22.12 35.79 12.00 4.50 18.47 31.58 43.70
2008 20.59 11.50 20.59 34.67 12.00 4.50 21.85 31.58 43.70
2009 20.00 11.00 20.00 34.67 12.00 4.50 21.85 32.71 43.70

## Deferred Income Plans - Maximum Contributions

Year RRSP(1) RPP(2)
1995 \$14,500 \$15,500
1996-2002 \$13,500 \$13,500
2003 \$14,500 \$15,500
2004 \$15,500 \$16,500
2005 \$16,500 \$18,000
2006 \$18,000 \$19,000
2007 \$19,000 \$20,000
2008 \$20,000 \$21,000
2009 \$21,000 \$22,000
2010 \$22,000 -
(1) RRSP: Registered Retirement Savings Plan
(2) RPP: Registered Pension Plan

12
Table of Canadian Federal Tax Rates for the years 2001- 2010
2006 2007 2010
Portion 2001 2002 2003 2004 2005 2008 2009
1st portion of taxable income \$30,754 \$31,677 \$32,183 \$35,000 \$35,595 \$36,378 \$37,178 \$37,885 \$40,726 \$40,970
Applicable Rate 16.00% 16.00% 16.00% 16.00% 15.00% 15.25% 15.00% 15.00% 15.00% 15.00%
Next portion of taxable \$40,971
income \$30,755 \$31,677 \$32,185 \$35,000 \$35,595 \$36,378 \$37,179 \$37,884 \$40,726
Applicable Rate 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00% 22.00%
Next portion of taxable \$45,080
income \$38,491 \$39,646 \$40,280 \$43,804 \$44,549 \$45,529 \$46,530 \$47,415 \$44,812
Applicable Rate 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00% 26.00%
On the amount over \$100,000 \$103,000 \$104,648 \$113,804 \$115,739 \$118,285 \$120,887 \$123,184 \$126,264 \$127,021
Applicable Rate 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00% 29.00%
Source: Dayarayan centre of tax research

Table of Individual Income Tax Rates for the Province of British Columbia / 2001- 2010
Portion 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
st
1 portion of taxable income \$30,484 \$31,124 \$31,653 \$32,476 \$33,061 \$33,755 \$34,397 \$35,016 \$35,716 \$35,859
Applicable Rate 7.30% 6.05% 6.05% 6.05% 6.05% 6.05% 5.70% 5.06% 5.06% 5.06%
Next portion of taxable income \$30,485 \$31,125 \$31,655 \$32,478 \$33,062 \$33,756 \$34,397 \$35,017 \$35,717 \$35,860
Applicable Rate 10.50% 9.15% 9.15% 9.15% 9.15% 9.15% 8.65% 7.70% 7.70% 7.70%
Next portion of taxable income \$9,031 \$9,221 \$9,377 \$9,621 \$9,794 \$10,000 \$10,190 \$10,373 \$10,581 \$10,623
Applicable Rate 13.70% 11.70% 11.70% 11.70% 11.70% 11.70% 11.10% 10.50% 10.50% 10.50%
Next portion of taxable income \$15,000 \$15,315 \$15,575 \$15,980 \$16,268 \$16,610 \$16,925 \$17,230 \$17,574 \$17645
Applicable Rate 15.70% 13.70% 13.70% 13.70% 13.70% 13.70% 13.00% 12.29% 12.29% 12.29%
On the amount over \$85,000 \$86,785 \$88,260 \$90,555 \$92,185 \$94,121 \$95,909 \$97,636 \$99,588 \$99,987
Applicable Rate 16.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70% 14.70%
Source: Dayarayan centre of tax research

13
BC Combined Federal and Provincial Income Tax Rates for Income Earned by a Canadian-
Controlled Private Corporation(CCPC)
Active
Small Business Income Income General Active
Effective date Investment Income
up to \$400,000 between Business Income
\$400,000 and
\$500,000
01-Jan-08 15.5/14.5/13.5% - 31.5/30.5% 46.7/45.7%
01-Jan-09 13.50% 22.00% 30.00% 45.70%
01-Jan-10 13.50% 21.50% 28.50% 45.20%
01-Jan-11 13.50% 21.00% 26.50% 44.70%

## BC Provincial Income Tax Rates for Income Earned by a Canadian-Controlled Private

Corporation(CCPC)
Active
Small Business Income Income General Active
Effective date Investment Income
up to \$400,000 between Business Income
\$400,000 and
\$500,000
01-Jan-08 4.5/3.5/2.5% - 12/11% 12/11%
01-Jan-09 2.50% 11% 11% 11%
01-Jan-10 2.50% 10.50% 10.50% 10.50%
01-Jan-11 2.50% 10% 10% 10%

14
2008-2011
Description 2008 2009 2010 2011
Federal \$400,000 \$500,000 \$500,000 \$500,000
British Columbia \$400,000 \$400,000 \$400,000 \$400,000

## Capital Gains Small Business Other Income

Eligible Dividends
Dividends
2004 2005 2006 2007 2008 2009 2010
2004 2005-2010 2004 2005-2010 2004 2005-2006 2007-2009 2010 2004 2005-2010
first \$35,000 first \$35,595 first \$36,378 first \$37,178 first \$37,885 first \$40,726 first \$40,970
8.00% 7.50% 3.33% 2.08% 3.33% 2.08% (5.75%) (4.28%) 16% 15.00%

over \$35,000 over \$35,595 over \$36,378 over \$37,178 over \$37,885 over \$40,726 over \$40,970
up to \$70,000 up to \$71,190 up to \$72,756 up to \$74,357 up to \$75,769 up to \$81,452 up to \$81,941
11.00% 11.00% 10.83% 10.83% 10.83% 10.83% 4.40% 5.80% 22% 22.00%

over \$70,000 over \$71,190 over \$72,756 over \$74,357 over \$75,769 over \$81,452 over \$81,941
up to \$113,804 up to \$115,739 up to \$118,285 up to \$120,887 up to \$123,184 up to \$126,264 up to \$127,021
13.00% 13.00% 15.83% 15.83% 15.83% 15.83% 10.20% 11.56% 26% 26.00%

over \$113,804 over \$115,739 over \$118,285 over \$120,887 over \$123,184 over \$126,264 over \$127,021
14.50% 14.50% 19.58% 19.58% 19.58% 19.58% 14.55% 15.88% 29% 29.00%

Marginal tax rate for dividends is a % of actual dividends received (not grossed-up amount).

## Federal Basic Personal Amount Tax Rate

2004 2005 2006 2007 2008 2009 2010 2004 2005 & 2007-2010 2006

\$8,012 \$8,648 \$9,039 \$9,600 \$9,600 \$10,320 \$10,382 16.00% 15.00% 15.25%

15
Source: Dayarayan centre of tax research

The tax rate tables show the combined federal plus provincial/territorial marginal tax rate for 4 different types of
income - the 2 types of Canadian dividends, capital gains, and all other income. The other income column shows
the actual tax rates for each tax bracket. A person's marginal tax rate is the tax rate that will be applied to the next
dollar earned.

The marginal tax rates on capital gains and Canadian dividend income are lower than on other types of income,
because:

##  only 50% of capital gains are included in taxable income

 Either 125% or 145% of Canadian dividends are included in taxable income, but a dividend tax credit is
deducted from taxes payable. See the Dividend Tax Credit page for more information.

Other income includes income from employment, self-employment, interest from Canadian or foreign sources,
foreign dividend income, etc.

With some marginal tax rate tables, the marginal tax rate at \$60,000 for dividends is the rate that would apply if
there was no income besides dividend income. This is not the way our tax rate tables work.

In our tables, the marginal tax rates for capital gains and dividends at any income level (say \$60,000) are the
marginal rates on the next dollar of actual capital gains or actual dividend income, if the taxpayer has \$60,000 of
taxable income from sources other than dividends.

16
Example: the combined federal/BC marginal tax rate for a person earning \$72,000 of employment income in 2009
would be

##  32.5% for employment income

 16.25% for capital gains
 3.68% for eligible Canadian dividends

## Employee does not pay GST/HST on taxable benefits

The employee does not pay GST/HST you have to remit on taxable benefits. As explained
in previous chapters, an amount for GST/HST has already been added to the taxable
benefit reported on the employee's T4 slip.

## Example 1: Remitting GST/HST on automobile benefits in a non-participating province

As a corporation registered for GST/HST, you buy a vehicle that is used more than 50% in commercial activities
and is made available to your employee during 2009. The last establishment where the employee ordinarily
reported in the year for the corporation was located in Ontario.

You calculated a taxable benefit (including GST and PST) of \$4,800 on the standby charge and an operating
expense benefit of \$600. Your employee reimbursed you \$1,800 for the automobile operating expenses within
45 days following the end of 2009. You did not include this amount as a taxable benefit.

You claimed an ITC for the purchase of the automobile and also on the operating expenses. Since the benefit is
taxable under the Income Tax Act, and no situations described in the section Situations where we do not consider
you to have collected GST/HST apply, you calculate the GST remittance as follows:

17
Standby charge benefit
Taxable benefit reported on T4 \$4,800
GST considered to have been collected on the benefit \$4,800 × 4/104 = \$184.62
Operating expense benefit
Taxable benefit reported on T4 \$600
Employee's partial reimbursement of operating expenses \$1,800
Total value of the benefit \$2,400
GST considered to have been collected on the benefit \$2,400 × 3% = \$72.00
Total GST to be remitted on the automobile benefit \$256.62

You are considered to have collected GST in the amount of \$256.62 at the end of February 2010. You have to
include this amount on your GST/HST return for the reporting period that includes the last day of February 2010.

## Example 2: Remitting GST/HST on automobile benefits in a participating province

Using the same facts as in Example 1, assume that the last establishment to which the employee ordinarily reported
in the year for the corporation was located in Nova Scotia. In this case, you would calculate the HST remittance as
follows:

## Standby charge benefit

Taxable benefit reported on T4 \$4,800
HST considered to have been collected on the benefit \$4,800 × 12/112 = \$514.29
Operating expense benefit
Taxable benefit reported on T4 \$600
Employee's partial reimbursement of operating expenses \$1,800

18
Total value of the benefit \$2,400
HST considered to have been collected on the benefit \$2,400 × 9% = \$216.00
Total HST to be remitted on the automobile benefit \$730.29

You are considered to have collected HST in the amount of \$730.29 at the end of February 2010. You have to
include this amount on your GST/HST return for the reporting period that includes the last day of February 2010.

## Example 3: Long service award

You bought a watch for \$560 (including GST/HST and PST) for your employee to mark the employee's 25 years of
service. You reported a taxable benefit of \$560 in box 14 and under code 40 on the employee's T4 slip.

You could not claim an ITC because you bought the watch for the employee's exclusive personal use and
enjoyment. Since you cannot claim an ITC, you are not considered to have collected GST/HST and, as a result, you
will not have to remit GST/HST on the benefit.

## Example 4: Special clothing

You provided your employee with safety footwear designed to protect him or her from particular hazards
associated with his or her employment. Since we do not consider the footwear to be a taxable benefit to the
employee for income tax purposes, you are not considered to have collected GST/HST on the footwear and you do
not have to remit GST/HST. However, you can claim an ITC for any GST/HST you paid on the footwear.

19
Benefits Chart
This chart indicates whether the taxable allowances and benefits discussed in this guide are subject to CPP and
EI withholdings, and shows which codes you should use to report them on the employee's T4 slip. The chart also
indicates whether GST/HST has to be included in the value of the taxable benefit for income tax purposes. Cash
reimbursements and non-cash benefits are subject to GST/HST, unless they are for exempt or zero-rated supplies.
Cash allowances are not subject to GST/HST.

## Taxable allowance or benefit CPP EI Code GST/HST

Automobile and motor vehicle allowances yes yes 40 no
Automobile standby charge and operating expense benefits yes no 34 yes
[Note 1]
Board and lodging, if cash earnings also paid in the pay period yes yes 30
[Note 1]
Board and lodging, if no cash earnings paid in the pay period yes no 30
Cellular phone service – in cash yes yes 40 yes
Cellular phone service – non-cash yes no 40 yes
Child care expenses – in cash yes yes 40 yes
Child care expenses – non-cash yes no 40 yes
[Note 2]
Counseling services – in cash yes yes 40
[Note 2]
Counseling services – non-cash yes no 40
Disability-related employment benefits – in cash yes yes 40 yes
20
Disability-related employment benefits – non-cash yes no 40 yes
Discounts on merchandise and commissions on sales yes no 40 yes
Educational allowances for children yes yes 40 no
Gifts and awards – in cash yes yes 40 no
Gifts and awards – non-cash/near-cash yes no 40 yes
Group term life insurance policies: Employer-paid premiums yes no 40 no
[Note 3]
Housing, rent-free or low-rent – in cash yes yes 30
[Note 4] [Note 3]
Housing, rent-free or low-rent – non-cash yes 30
Interest-free and low-interest loans [Note 5] yes no 36 no
Internet service (at home) – in cash yes yes 40 yes
Internet service (at home) – non-cash yes no 40 yes
Meals – Overtime allowances yes yes 40 no
Meals – Overtime – in cash yes yes 40 yes
Meals – Overtime – non-cash yes no 40 yes
Meals – Subsidized yes no 30 yes
[Note 6]
Medical expenses – in cash yes yes 40
[Note 6]
Medical expenses – non-cash yes no 40
Moving expenses and relocation benefits – in cash yes yes 40 yes
Moving expenses and relocation benefits – non-cash yes no 40 yes
Moving expenses – non accountable allowance over \$650 yes yes 40 no
[Note 7]
Municipal officer's expense allowance yes no 40 no

21
Parking – in cash yes yes 40 yes
Parking – non-cash yes no 40 yes
Power saws and tree trimmers – rental paid by employer for employee-owned tools yes yes 40 yes
Premiums under provincial hospitalization, medical care insurance, and certain
yes yes 40 no
federal government plans – in cash
Premiums under provincial hospitalization, medical care insurance, and certain
yes no 40 no
federal government plans – non-cash
[Note 8]
Professional membership dues – in cash yes yes 40
[Note 8]
Professional membership dues – non-cash yes no 40
Recreational facilities – in cash yes yes 40 yes
Recreational facilities – non-cash yes no 40 yes
Recreational facilities – club membership dues yes no 40 yes
Registered retirement savings plan (RRSP) contributions yes yes 40 no
[Note 8]
Registered retirement savings plan (RRSP) administration fees yes no 40
Scholarships and bursaries yes yes 40 no
[Note 9]
Security options yes no 38 no
Social events – in cash yes yes 40 no
Social events – non-cash yes no 40 yes
Spouse or common-law partner's travelling expenses – cash allowance yes yes 40 no
Spouse or common-law partner's travelling expenses – non-cash yes no 40 yes
Tax-Free Savings Account – contributions yes yes 40 no
[Note 10]
Tax-Free Savings Account – administration fees yes no 40
22
Tool allowance yes yes 40 no
Tool reimbursement yes yes 40 yes
Transit passes – in cash yes yes 40 yes
Transit passes – non-cash yes no 40 yes
Transportation to and from the job – in cash yes yes 40 yes
Transportation to and from the job – non-cash yes no 40 yes
[Note 11]
Travel assistance in a prescribed zone yes yes 32 yes
Travelling allowances to a part-time employee and other employees yes yes 40 no
[Note 10]
Tuition fees – in cash yes yes 40
[Note 10]
Tuition fees – non-cash yes no 40
Uniforms and special clothing – in cash yes yes 40 yes
Uniforms and special clothing – non-cash yes no 40 yes
Wage-loss replacement or income maintenance non-group plan premiums yes no 40 no
Notes
1
The rent portion of the lodging benefit is subject to GST/HST if the dwelling is occupied for less than one
month; the utility portion is subject to GST/HST unless municipality supplied.
2
Certain counseling services are subject to GST/HST. If the services you pay are subject to GST/HST, include
the GST/HST in the value of the benefit.
3
The rent portion of the housing benefit is subject to GST/HST if the dwelling is occupied for less than one
month; the utility portion is subject to GST/HST unless municipality supplied.
4
If it is a non cash benefit, it is insurable if it is received by the employee in addition to cash earnings in a pay
period. If no cash earnings are paid in the pay period, it is not insurable.

23
5
Enter the home relocation loan deduction under code 37.
6
7
Enter the exempt amount under code 70.
8
Certain fees are subject to GST/HST. If the fees you pay are subject to GST/HST, include it in the value of the
benefit.
9
Enter the amount of the security options deduction under code 39 or 41, as applicable.
10
Certain fees are subject to GST/HST. If the fees you pay are subject to GST/HST, include it in the value of the
benefit.
11
Enter the amount of medical travel assistance under code 33.

## (Source: Employers' Guide Taxable Benefits and Allowances 2009)

24
Total average household expenditure by province

## 2007 2008 2007 to 2008

\$ % change
Newfoundland and Labrador 55,010 57,710 4.9
Prince Edward Island 55,570 58,710 5.7
Nova Scotia 59,990 60,330 0.6
New Brunswick 58,210 58,440 0.4
Quebec 57,310 60,480 5.5
Ontario 76,650 77,310 0.9
Manitoba 63,300 63,510 0.3
Alberta 85,910 86,910 1.2
British Columbia 72,620 73,120 0.7

Average total expenditure and shares of spending of major categories for provinces, 2008

## Average household spending Food Shelter Clothing Transportation Personal taxes2

\$ Shares of spending1(%)
Canada 71,360 10.4 19.9 4.0 13.6 20.5
Newfoundland and Labrador 57,710 11.7 16.5 4.7 15.6 18.0
Prince Edward Island 58,710 11.5 19.0 3.6 15.2 16.2
Nova Scotia 60,330 11.3 18.6 3.7 14.7 17.9
New Brunswick 58,440 11.2 17.2 3.5 17.0 17.8
Quebec 60,480 12.2 18.5 3.9 13.2 20.5
Ontario 77,310 9.7 21.2 4.2 13.1 21.2
Manitoba 63,510 10.2 18.2 3.9 14.3 18.8
Saskatchewan 68,280 9.2 17.2 3.8 16.0 19.1
Alberta 86,910 8.9 19.0 3.8 14.0 21.9
British Columbia 73,120 10.9 20.8 4.0 13.8 18.7

## 1.Shares of spending represent the proportions of total average household spending.

2.Percentage of spending on personal taxes depends on provincial and federal income tax rates as well as household income distribution.

25
GST/HST Notices-Notice 246
December 2009

Source: http://www.cra-arc.gc.ca/E/pub/gi/notice246/notice246-e.html

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

NOTE: This notice replaces the earlier version dated October 2009 and entitled
Harmonized Sales Tax – Questions and Answers on Transitional Rules for Non-
Residential Real Property Situated in British Columbia. It has been revised to add
and update the questions and answers following a recent information notice
released by the Government of British Columbia that addresses the transitional
rules for residential real property.

On July 23, 2009, the Government of British Columbia announced its plans to implement a
Harmonized Sales Tax (HST), which, subject to legislative approval by the British Columbia
(B.C.) legislature, would come into effect on July 1, 2010, and be administered by the

This publication provides questions and answers that reflect the proposed tax changes as
announced in the Ministry of Finance Tax Information Notices, HST Notice #1 General
Transition Rules for British Columbia HST issued by the Government of British Columbia on

26
October 14, 2009 and HST Notice #3 Residential Housing – New Housing Rebates and
Transitional Rules for British Columbia HST issued by the Government of British Columbia
on November 18, 2009.

Any commentary in this publication should not be taken as a statement by the CRA that
these proposed changes will be enacted in their current form.

## • Residential real property

o General
o Application of the HST to new housing
o Grandparented sales of housing
 Assignment of purchase and sale agreements for grandparented housing
 Resellers of housing – Sales of housing purchased on a grandparented basis by a first
reseller
 Resellers of housing – Sales of housing purchased on a grandparented basis by a
subsequent reseller
 Self-assessment requirements
o New housing rebates
o Provincial sales tax (PST) transitional new housing rebates
o Transitional tax adjustment for houses and residential condominiums
o Application of the HST to new rental housing
o New residential rental property rebates
o Builders' disclosure requirements
o Resellers' disclosure requirements

## • Non-residential real property

27
o Sales of non-residential real property
o Leases of non-residential real property
 General rule
o Progress payments
o Holdbacks

## Residential real property

Note: For purposes of this document, the word house means both the building and land
portions of the house, unless otherwise specified. In applying the arm's length test in this
notice, aunts and uncles would be considered to be related to their nieces and nephews. A
specified related party is any person who is not dealing at arm's length with, or who is a
person associated with, the original builder. Associated is defined in section 127 of the
Excise Tax Act.

General

What is the current provincial sales tax (PST) treatment for new housing in B.C.?
For information relating to the current application of the PST in B.C., you may visit the
Government of British Columbia Web site at www.gov.bc.ca, call 604-660-4524 if you are
located in Vancouver or 1-877-388-4440 toll-free elsewhere in B.C., or send your
questions by email to CTBTaxQuestions@gov.bc.ca.

28
1. What is the proposed treatment for sales of residential housing in B.C. under a
harmonized sales tax (HST)?

The HST at 12%, composed of a federal part at 5% and a provincial part at 7%, would
apply to a builder's sale of a newly constructed or substantially renovated residential
complex, including a multiple unit residential complex (e.g., an apartment building). The
sale of housing that has been previously occupied by an individual as a place of residence
and that is exempt from GST would also be exempt for purposes of the HST. The
definitions in the Excise Tax Act that relate to housing (e.g., builder, residential complex,
residential unit, residential condominium unit, substantial renovation) and the CRA's
current policies regarding the application of the GST to housing, would generally apply
under the HST.

2. I am selling my house and the sale is exempt from GST. If the closing date for
the sale of my house is after June 2010, would the sale of the house be exempt
under the HST?

Yes. The sale of your previously occupied house would be exempt under the HST and you
would not be required to charge or collect the HST.

## 3. I am a builder and I am registered for GST/HST purposes. I currently claim

input tax credits (ITCs) for the 5% GST that I pay on the lumber I purchase to
build new houses. Would I be able to claim ITCs for the 12% HST paid on lumber
purchased after June 2010?

Yes. You would be able to claim an ITC for the 12% HST paid on your purchase of lumber
and other construction materials that you use to construct new housing.

29
Application of the HST to new housing

## 5. When would the HST apply to a sale of a residential complex?

Generally, the HST would apply to a builder's taxable supply by way of sale of a newly
constructed or substantially renovated residential complex where both ownership and
possession of the complex are transferred to the purchaser under the agreement for the
supply after June 2010. If either ownership or possession is transferred to the purchaser
before July 2010, the HST would not apply.

This general rule applies to sales of all housing types, including residential condominium
units, mobile homes and floating homes. An exception exists for certain types of housing if,
among other conditions, a written agreement of purchase and sale was entered into on or
before November 18, 2009 – see the section below on grandparented sales of housing.

The HST would generally be payable on the earlier of the day ownership or possession of
the residential complex is transferred to the purchaser. In the case of a residential
condominium unit, if possession of the unit is transferred before the condominium has
been registered under the Strata Property Act [S.B.C. 1998], the HST would generally
become payable on the earlier of the day ownership of the unit is transferred or the day
that is 60 days following the date of registration.

6. A builder and a purchaser enter into a written agreement of purchase and sale
in December 2009 for a newly constructed house. The agreement provides that
ownership and possession of the house will transfer to the purchaser on July 14,
2010. The builder is not a reseller. Would the HST apply to the sale?

30
Yes. Since the written agreement of purchase and sale is entered into after November 18,
2009, and both ownership and possession of the house transfer to the purchaser after June
2010, the HST at 12% would apply to the sale. If the construction of the house is at least
10% complete as of July 1, 2010, the purchaser would be entitled to claim a PST
transitional new housing rebate – see the section below on PST transitional new housing
rebates. The purchaser may also be entitled to claim a GST new housing rebate in respect
of the federal part of the HST and a B.C. new housing rebate in respect of the provincial
part of the HST provided that all of the conditions for each of these rebates are met– see
the section below on new housing rebates. For more information on resellers, see the
section below on resellers of housing.

7. When would the HST not apply to a sale of a newly constructed or substantially
renovated residential complex?

Generally, the HST would not apply to a builder's taxable supply by way of sale of a newly
constructed or substantially renovated residential complex where either ownership or
possession of the complex is transferred, under a written agreement of purchase and sale,
to the purchaser before July 2010, regardless of when the purchase and sale agreement
was entered into. However, GST at 5% would apply.

The HST would also not apply if the sale of the newly constructed or substantially
renovated residential complex is grandparented – see the sections below on grandparented
sales of housing and resellers of housing. However, GST at 5% would apply to the sale of
the complex.

8. A builder and a purchaser enter into a written agreement of purchase and sale
on December 3, 2009 for a newly constructed house. The agreement provides

31
that ownership and possession of the house will transfer to the purchaser in May
2010. Would the HST apply to the sale?

No. If ownership or possession (or both) of the house transfers to the purchaser in
accordance with the written agreement before July 2010, the HST would not apply.
However, the GST at 5% would apply to the sale of the house.

## 9. I entered into a written agreement of purchase and sale for a newly

constructed house with a builder on June 5, 2009. I take ownership and
possession of the house, in accordance with the agreement, in May 2010. Would
the HST apply to the sale?

No. If ownership or possession (or both) of the house transfers to you in accordance with
the written agreement before July 2010, the HST would not apply, regardless of when the
purchase and sale agreement was entered into. However, the GST at 5% would apply to
the sale of the house.

9.1 I entered into a written agreement of purchase and sale in December 2009 for
a newly constructed residential condominium unit. The agreement provides that
possession of the unit will transfer to me in May 2010 but ownership will only be
transferred after July 1, 2010, following the registration of the condominium
complex. Would the HST apply to the sale?

No. If ownership or possession (or both) of the residential condominium unit transfers to
you in accordance with the written agreement before July 2010, the HST would not apply.
However, the GST at 5% would apply to the sale of the residential condominium unit.

## Grandparented sales of housing

32
10. What is a grandparented sale of a house?

Where a written agreement of purchase and sale for a newly constructed or substantially
renovated detached house, semi-detached house, attached house, residential condominium
unit or condominium complex was entered into on or before November 18, 2009, the sale
would generally be grandparented if both ownership and possession of the housing transfer
to the purchaser, under the agreement, after June 2010. In this case, the provincial part of
the HST would not be payable on the sale. Only the federal part of the HST would apply,
i.e., the sale would be subject to the GST at 5%. In the case of a detached house,
semi-detached house or attached house, the purchaser must be an individual in order for
the grandparenting rule to apply. In the case of residential condominiums, the
grandparenting rule would apply to all purchasers, including individuals.

While a grandparented sale of housing is not subject to the HST, the builder would be
required to remit a transitional tax adjustment if the construction straddles the
July 1, 2010 implementation date and the construction is less than 90% complete as of
July 1, 2010. The transitional tax adjustment is intended to approximate the amount of the
PST that would have been paid in respect of the construction costs incurred after June
2010 – see the section below on the transitional tax adjustment for houses and residential
condominiums.

For information on the assignment of a purchase and sale agreement for a grandparented
house, see the section below on assignments of purchase and sale agreements for
grandparented housing.

For information on resellers of housing, see the sections below on resellers of housing.

## 11. Are there any exceptions to the grandparenting rule?

33
Yes. For example, newly constructed or substantially renovated houses built by owners for
their personal use, as well as duplexes, traditional apartment buildings, mobile homes and
floating homes would not be grandparented under the transitional rules for purchases of
new housing, as the transitional rules would apply differently to these houses.

Modular homes are considered to be mobile homes for GST/HST purposes provided they
meet certain criteria including that the manufacture or assembly of the modular home is
substantially completed prior to being moved to a site. For more detailed information refer
to GST/HST Policy Statement P-223, Meaning of manufacture or assembly of which is
completed or substantially completed in the definition of mobile home.

Reference should also be made to the sections below on assignments of purchase and sale
agreements for grandparented housing and on resellers of housing.

12. I entered into a written agreement of purchase and sale for a new house with
a builder on October 31, 2009. I take ownership and possession of the house, in
accordance with the agreement, in August 2010. The builder is not a reseller.
Would the HST at 12% apply to the sale?

Generally, no. The purchase of the house would normally be grandparented since the
written agreement of purchase and sale was entered into on or before November 18, 2009
and both ownership and possession of the house are transferred after June 2010. However,
the sale of the house would be subject to the GST at 5%.

## 13. I am a builder and I am registered for GST/HST purposes. I am constructing a house

whose sale would be grandparented and the construction of this house straddles the July 1,
2010 implementation date for the HST. Would I be able to claim ITCs for the HST paid on

34
lumber and other construction materials purchased after June 30, 2010 that will be used to
complete the construction of this grandparented house?

Yes. Even if the sale of the house would normally be grandparented, you would be entitled
to claim ITCs for the 12% HST paid on the lumber and other construction materials used in
the construction. If the construction of the house is less than 90% complete as of
July 1, 2010, you would be required to account for a transitional tax adjustment in
calculating your net tax remittance – see the section below on transitional tax adjustment
for houses and residential condominiums.

14. After entering into a written agreement of purchase and sale on November 1,
2009 for a newly constructed house, the purchaser requests that upgrades be
made to the house. Ownership and possession of the house will transfer to the
purchaser under the agreement on September 10, 2010. The builder is not a
reseller. Would the HST apply to the additional amount payable for the upgrades?

Upgrades to a house will generally result in modifications to the existing agreement such
that the upgrades form part of the written agreement for the purchase and sale of the
house. In such a case, the tax applicable to the purchase of the house would prevail. In
this case, since a written agreement of purchase and sale was entered into on or before
November 18, 2009, and ownership and possession will transfer to the purchaser after
June 2010, the HST would not apply. However, the GST at 5% would apply on the total
amount payable for the house, including the amount payable for the upgrades.

## Where an existing agreement of purchase and sale is modified, varied or otherwise

materially altered to such an extent that it is considered to be a new agreement, the
application of the transitional rules will be based on the date that the new agreement is

35
entered into. Reference should be made to GST/HST Policy Statement P-249, Agreements
and Novation.

If a purchaser and a builder renegotiate the terms of a written agreement of purchase and
sale for new housing, that was entered into on or before November 18, 2009, and enter
into a new agreement after November 18, 2009, the transitional rules would apply based
on the date that the new agreement was entered into.

14.1 After entering into a written agreement of purchase and sale for a newly
constructed house on October 10, 2009 for a house that is to be built on lot 22,
the purchaser and the builder renegotiate the terms of the agreement on
November 25, 2009, such that the house will now be built on lot 8 as opposed to
lot 22. Ownership and possession will transfer to the purchaser under this new
agreement on July 15, 2010. Would the HST apply to the sale of the house?

Yes. The HST at 12% would apply to the sale of the house since the written agreement of
purchase and sale for the house is entered into after November 18, 2009, and both
ownership and possession are transferred after June 2010. The transitional rules would
apply based on the new agreement entered into on November 25, 2009 in respect of the
house to be constructed on lot 8.

## Assignment of purchase and sale agreements for grandparented housing

14.2 A builder (referred to as the "original builder") and a purchaser enter into a
written agreement of purchase and sale for a newly constructed residential
condominium unit on October 4, 2009. In accordance with the agreement of
purchase and sale for the condominium unit, ownership and possession of the
unit will transfer to the purchaser on July 15, 2010. Would the HST apply to the

36
sale of the condominium unit if the purchaser assigns its rights under the
agreement to a third party?

Generally, no. Where a written agreement of purchase and sale for a grandparented
housing is assigned to a third party (assignee), the housing will remain grandparented
provided that the assignee receives ownership and possession of the grandparented
housing from the original builder, under the agreement with the original builder, after June
2010 and:

## • there is no novation of the agreement;

• the purchaser and the original builder are dealing at arm's
length or are not associated; and
• the original builder or a specified related party does not acquire
or reacquire by way of sale any legal or beneficial interest in the
housing.

Where all of the above conditions are met, the sale of the residential condominium unit
from the original builder to the assignee would be grandparented since the written
agreement of purchase and sale was entered into on or before November 18, 2009 and
both ownership and possession of the condominium unit are transferred after June 2010.
As such, the HST would not apply. However, the sale of the condominium unit would be
subject to the GST at 5%.

14.3 After entering into a written agreement of purchase and sale on October 1,
2009 for a newly constructed house with a builder (referred to as the "original
builder"), the purchaser who is an individual assigns its rights under the
purchase and sale agreement to an unrelated third party (assignee) for \$10,000
on December 15, 2009. In accordance with the agreement of purchase and sale
37
for the house, ownership and possession of the house will transfer to the
purchaser/assignee from the original builder on July 15, 2010. There is no
novation of the agreement. The original builder and the purchaser are not
associated and are dealing at arm's length. Would the assignee be required to
pay the HST on the purchase of the house? Would the assignee be required to pay
the HST to the purchaser on the \$10,000 paid in accordance with the assignment
agreement entered into on December 15, 2009?

The sale of the house by the original builder would remain grandparented since the
conditions for grandparenting when there is an assignment of a purchase and sale
agreement are met, and the written agreement of purchase and sale was entered into on
or before November 18, 2009 with both ownership and possession of the house being
transferred after June 2010. As such, the HST would not apply on the purchase of the
house from the original builder. However, the sale of the house would be subject to the
GST at 5%.

The \$10,000 paid under the assignment agreement is consideration paid for an interest in
the house supplied by the purchaser to the assignee. For GST/HST purposes, the supply of
an interest in real property is a supply of real property. If the purchaser is a builder for
GST/HST purposes, the supply would be subject to the GST/HST. However, since
ownership of the interest transfers to the purchaser under the assignment agreement on
December 15, 2009, the HST would not apply. The GST at 5% would apply to the \$10,000
paid to the purchaser.

## Resellers of housing – Sales of housing purchased on a grandparented basis by a

first reseller

38
14.4 A builder (referred to as the "original builder") and a purchaser enter into a
written agreement of purchase and sale for a newly constructed residential
condominium unit on October 4, 2009. In accordance with the agreement of
purchase and sale for the condominium unit, ownership and possession of the
unit will transfer to the purchaser on July 15, 2010. If the purchaser resells the
condominium unit, would the HST apply to the sale of the condominium unit?

A first reseller is the first purchaser that enters into a written agreement of purchase and
sale for grandparented housing with the original builder. Where the sale of the housing by
the first reseller is taxable for GST purposes, the HST would not apply to the sale (i.e., the
sale of the housing would be grandparented) if all of the following conditions are met:

## • the first reseller obtained possession of the housing from the

original builder after the construction or substantial renovation
was substantially completed;
• the original builder and the first reseller are dealing at arm's
length and are not associated;
• the first reseller:
o is a builder of the housing only because of paragraph (d) of
the definition of "builder" in the Excise Tax Act, or
o is a builder of the housing only because of paragraphs (b)
and (d) of the definition of "builder" in the Excise Tax Act
and the construction or renovation completed by the first
reseller is not greater than 10% of the total construction or
substantial renovation that was completed when the
housing was sold by the first reseller; and

39
• the original builder or a specified related party does not acquire
or reacquire by way of sale any legal or beneficial interest in the
housing.

In this case, the purchaser is a first reseller of the residential condominium unit. Where all
of the above conditions are met, the HST would not apply to the sale of the residential
condominium unit by the first reseller. However, the sale of the condominium unit would
be subject to the GST at 5%.

See question 54.1 for information on the disclosure requirements for resellers.

## 14.5 A builder (referred to as the "original builder") and a purchaser who is an

individual enter into a written agreement of purchase and sale for a newly
constructed house on October 18, 2009. In accordance with the agreement of
purchase and sale for the house, ownership and possession of the house will
transfer from the original builder to the purchaser on July 15, 2010. The
purchaser acquires the house for resale. The construction of the house is
substantially completed on July 10, 2010. The purchaser does not complete any
of the construction. The original builder and the purchaser are not associated and
are dealing at arm's length. On July 20, 2010, the purchaser sells the house to an
unrelated third party. The house has not been occupied by an individual. Would
the sale of the house to the third party be subject to the HST?

No. The purchaser is a first reseller of the house. As such, the sale of the house by the first
reseller would not be subject to the HST since the conditions for grandparenting in the case
of a first reseller are met and the original written agreement of purchase and sale for the
house was entered into on or before November 18, 2009 with both ownership and

40
possession of the house being transferred under the agreement after June 2010. The sale
of the house to the unrelated third party would be subject to the GST at 5%.

## For information on disclosure requirements for resellers, see question 54.1.

14.6 Where the HST applies to a sale of a house that was purchased on a
grandparented basis by a first reseller, would the first reseller be entitled to
claim an ITC or a rebate to recover the transitional tax adjustment and/or PST
that may be embedded in the amount paid by the first reseller to purchase the
house?

Yes. Where the HST applies to the sale of the house by the first reseller, the first reseller
would be entitled to claim an ITC or a rebate equal to 2% of the consideration paid by the
first reseller to purchase the house from the original builder on a grandparented basis. The
amount of the ITC or rebate represents the estimated PST and/or the transitional tax
adjustment amount considered to be collected by the original builder and embedded in the
price paid by the first reseller to purchase the house.

## 14.7 A builder (referred to as the "original builder") and a purchaser, who is an

individual, enter into a written agreement of purchase and sale for a newly
constructed house on October 18, 2009 for \$400,000. In accordance with the
agreement of purchase and sale for the house, ownership and possession of the
house will transfer from the original builder to the purchaser on July 15, 2010.
The purchaser is a GST/HST registrant who acquires the house for resale. The
construction of the house is substantially completed on July 10, 2010. The
purchaser does not complete any of the construction. The original builder and the
purchaser are associated. On July 20, 2010, the purchaser sells the house to an

41
unrelated third party for \$435,000. The house has not been occupied by an
individual. Would the sale of the house to the third party be subject to the HST?

Yes. Although the purchaser is a first reseller of the house, the conditions for
grandparenting in the case of a first reseller are not met given that the original builder and
the first reseller are associated. As such, the sale of the house by the first reseller would be
subject to the HST at 12%.

Given that the sale of the house by the first reseller would be subject to the HST, the first
reseller would be entitled to claim an ITC equal to \$8,000 (i.e., 2% of \$400,000 - the
consideration paid by the first reseller to the original builder to purchase the house on a
grandparented basis).

## Resellers of housing – Sales of housing purchased on a grandparented basis by a

subsequent reseller

14.8 A builder (referred to as the "original builder") and a first reseller enter into
a written agreement of purchase and sale for a newly constructed residential
condominium unit on October 4, 2009. In accordance with the agreement of
purchase and sale for the condominium unit, ownership and possession of the
unit will transfer to the first reseller on July 15, 2010. The first reseller sells the
condominium unit to an unrelated third party. If the third party sells the
condominium unit, would the HST apply to the sale of the condominium unit?

Where the sale of the housing that was purchased on a grandparented basis by a
subsequent reseller is taxable for GST purposes, the HST would not apply to the sale (i.e.,
the sale would be grandparented) if all of the following conditions are met:

42
• the purchase of the housing by the subsequent reseller was not
subject to the HST;
• the subsequent reseller:
o is a builder of the housing only because of paragraph (d) of
the definition of "builder" in the Excise Tax Act, or
o is a builder of the housing only because of paragraphs (b)
and (d) of the definition of "builder" in the Excise Tax Act
and the construction or renovation completed by the first
reseller is not greater than 10% of the total construction or
substantial renovation that was completed when the
housing was sold by the first reseller; and
• the original builder or a specified related party does not acquire
or reacquire by way of sale any legal or beneficial interest in the
housing.

In this case, the third party is a subsequent reseller of the residential condominium unit.
Where all of the above conditions are met, the HST would not apply to the sale of the
condominium unit by the subsequent reseller. However, the sale of the condominium unit
would be subject to the GST at 5%.

See question 54.1 for information on the disclosure requirements for resellers.

Self-assessment requirements

14.9 What are the tax consequences if the original builder or a specified related
party acquires a legal or beneficial interest in housing that was newly constructed
or substantially renovated by the original builder and sold by the original builder
on a grandparented basis?
43
Where the original builder or a specified related party acquires from any person by way of
a taxable sale, a legal or beneficial interest (including a sale by way of reversion or the
exercise of an option or a right of first refusal) in housing previously supplied on a
grandparented basis by the original builder, the original builder or the specified related
party, as the case may be, would be required to self-assess and pay the provincial part of
the HST in respect of the interest.

In this case, the original builder or the specified related party, as the case may be, would
generally be entitled to claim an ITC or a rebate equal to 2% of the consideration paid to
the original builder on the first grandparented sale of the housing.

## New housing rebates

15. Would a new housing rebate be available for the provincial part of the HST?

The B.C. new housing rebate would be available in respect of the provincial part of the HST
paid on the purchase of a newly constructed or substantially renovated house. Where the
house is purchased for use as the primary place of residence of the purchaser or a relation
of the purchaser and the remaining conditions for claiming a GST new housing rebate are
met*, the purchaser would be entitled to claim a B.C. new housing rebate of 71.43% of the
provincial part of the HST, subject to a maximum rebate amount. In the case of the
purchase of a house, the maximum rebate amount is \$26,250. See question 19, for
maximum rebate amounts for other types of housing. The B.C. new housing rebate would
be available regardless of the purchase price of the house. (* Note that the \$450,000
threshold that applies for the GST new housing rebate would not apply to the B.C. new
housing rebate).

44
The B.C. new housing rebate would be available for the same types of residential
properties for which a GST new housing rebate is currently available. Qualifying housing
would include newly constructed and substantially renovated housing, co-operative
housing, owner-built housing, mobile homes, floating homes and housing on leased land.

16. I entered into a written agreement of purchase and sale for a new house with
a builder on October 31, 2009. I take ownership and possession of the house, in
accordance with the agreement, in August 2010. Would I be entitled to claim a
B.C. new housing rebate?

No. If the sale of the house is grandparented (see the section above on grandparented
sales of housing), the HST at 12% would not apply. However, the sale of the house would
be subject to the GST at 5%. You may be entitled to claim a GST new housing rebate
provided that you meet all of the conditions for claiming this rebate. Refer to GST/HST
Guide RC4028, GST/HST New Housing Rebate for more information on the new housing
rebate in respect of the GST.

17. I entered into a written agreement of purchase and sale for a new house on
November 30, 2009. The house will be my primary place of residence and I meet
all of the conditions for claiming a GST new housing rebate. I take ownership and
possession of the house, in accordance with the agreement, in August 2010.
Would I be entitled to claim a B.C. new housing rebate?

Yes. The sale of the house would be subject to the HST at 12% and you would be entitled
to claim a B.C. new housing rebate in respect of the provincial part of the HST, up to a
maximum rebate amount of \$26,250.

45
18. If I am entitled to claim a B.C. new housing rebate, would I still be able to
claim a new housing rebate for the federal part of the HST?

Provided that you meet all of the conditions for claiming the GST new housing rebate, you
would be entitled to claim a rebate for the federal part of the HST.

For example, if you purchased a new house for \$300,000 to use as your primary place of
residence, you would pay the HST of \$36,000. If you meet all of the other conditions for
claiming the rebate, you would be entitled to claim a GST new housing rebate of \$5,400 in
respect of the federal part of the HST and a B.C. new housing rebate of \$15,000 in respect
of the provincial part of the HST.

If you purchased a house for \$450,000 or more, you would not be entitled to claim a GST
new housing rebate in respect of the federal part of the HST. However, if you meet all of
the other conditions for claiming the rebate, you would be entitled to claim a B.C. new
housing rebate in respect of the provincial part of the HST.

19. If all of the conditions for claiming the rebate are met, how would the B.C.
new housing rebate in respect of the provincial part of the HST be calculated?

Purchase of a house

For purchases of newly constructed or substantially renovated houses, the B.C. new
housing rebate would be equal to 71.43% of the provincial part of the HST paid on the
purchase, up to a maximum rebate amount of \$26,250. There would be no phase out of
this rebate, such that homes priced above \$525,000 would qualify for the maximum rebate
amount of \$26,250. This rebate would essentially reduce the provincial part of the HST to a
rate of 2% on the first \$525,000 of the purchase price of the house.

46
Purchase of house together with lease of land

For purchases of newly constructed or substantially renovated houses together with land
leased from the builder, the B.C. new housing rebate would be equal to 4.47% of the price
paid for the building portion of a house on leased land, up to a maximum rebate amount of
\$26,250. There would be no phase out of this rebate. If the price paid for the building
portion of the newly constructed or substantially renovated house is above \$588,000, the
house would qualify for the maximum rebate amount of \$26,250.

## Purchase of mobile or floating home

For purchases of newly constructed or substantially renovated mobile homes and floating
homes, the B.C. new housing rebate would be equal to 71.43% of the provincial part of the
HST paid, up to a maximum rebate amount of \$26,250. There would be no phase out of
this rebate, such that mobile and floating homes priced above \$525,000 would qualify for
the maximum rebate amount of \$26,250.

## For newly constructed or substantially renovated houses in a cooperative housing complex

acquired by purchasing qualifying shares in the cooperative housing corporation, the B.C.
new housing rebate would be equal to 4.47% of the price paid for the qualifying share, up
to a maximum rebate amount of \$26,250. There would be no phase out of this rebate,
such that a qualifying share priced above \$588,000 would qualify for the maximum rebate
amount of \$26,250.

Owner-built housing

47
For owner-built housing, the maximum B.C. new housing rebate amount would depend on
whether the individual paid the provincial part of the HST on the purchase of the land upon
which the individual constructed or substantially renovated the housing.

• Where the provincial part of the HST was paid on the purchase
of the land, the B.C. new housing rebate would be equal to
71.43% of the provincial part of the HST paid, up to a maximum
rebate amount of \$26,250. There would be no phase out of this
rebate, such that owner-built homes with a fair market value
above \$525,000 would qualify for the maximum rebate amount
of \$26,250.
• Where the provincial part of the HST was not paid on the
purchase of the land, the B.C. new housing rebate would be
equal to 71.43% of the provincial part of the HST paid, up to a
maximum rebate amount of \$17,588.

The rebate for owner-built housing would be available for purchases of newly constructed
or substantially renovated mobile or floating homes and for housing constructed or
substantially renovated by an individual or a person hired by the individual to do so, for
use as the primary place of residence of the individual or a relation of the individual.

20. Assuming I would be entitled to claim the B.C. new housing rebate in respect
of the provincial part of the HST, what would the rebate amount be where the
purchase price of the house, not including the HST and any rebates, is:

(a) \$300,000?
(b) \$400,000?

48
(c) \$500,000?
(d) \$600,000?

The B.C. new housing rebate would be available in respect of the provincial part of the HST
paid for the house, up to a maximum rebate amount of \$26,250. The rebate would be
available for houses in all price ranges provided that all of the conditions for claiming the
rebate are met (e.g., a new house purchased in B.C. for use as the primary place of
residence of the purchaser or a relation of the purchaser).

(a) \$15,000 – Where the purchase price of the house, not including the HST and any
rebates, is \$300,000, the HST payable would be \$36,000, composed of the federal part at
5% (\$15,000) and the provincial part at 7% (\$21,000). The B.C. new housing rebate in
respect of the provincial part of the HST would be equal to \$15,000 in this case
(i.e., 71.43% of \$21,000). Note that the GST new housing rebate would also be available
in respect of the federal part of the HST paid on the purchase of the house. In this case,
the GST new housing rebate would be equal to \$5,400 (i.e., 36% of \$15,000).

(b) \$20,000 – Where the purchase price of the house, not including the HST and any
rebates, is \$400,000, the HST payable would be \$48,000, composed of the federal part at
5% (\$20,000) and the provincial part at 7% (\$28,000). The B.C. new housing rebate for
the provincial part of the HST would be equal to \$20,000 in this case (i.e., 71.43% of
\$28,000). Note that the GST new housing rebate would also be available in respect of the
federal part of the HST paid on the purchase of the house. In this case, the GST new
housing rebate would be equal to \$3,150 (i.e., \$6,300 × [(\$450,000 – \$400,000) ÷
\$100,000]).

(c) \$25,000 – Where the purchase price of the house, not including the HST and any
rebates, is \$500,000, the HST payable would be \$60,000, composed of the federal part at
49
5% (\$25,000) and the provincial part at 7% (\$35,000). The B.C. new housing rebate for
the provincial part of the HST would be equal to \$25,000 in this case (i.e., 71.43% of
\$35,000). There is no GST new housing rebate in respect of the federal part of the HST
paid on the purchase of a house where the purchase price is \$450,000 or more.

(d) \$26,250 – Where the purchase price of the house, not including the HST and any
rebates, is \$600,000, the HST payable would be \$72,000, composed of the federal part at
5% (\$30,000) and the provincial part at 7% (\$42,000). The B.C. new housing rebate for
the provincial part of the HST would be equal to \$26,250 in this case (i.e., 71.43% of
\$42,000, to a maximum rebate of \$26,250). There is no GST new housing rebate in
respect of the federal part of the HST paid on the purchase of a house where the purchase
price is \$450,000 or more.

## 20.1 I am constructing a house for my family on land that I purchased in January

2009. I paid GST on the purchase of the land. I have paid GST on the construction
materials used to date to construct the house. The construction of the house will
be completed in September 2010 and I will likely pay the HST on some additional
construction materials. Would I be entitled to claim a B.C. new housing rebate?

Yes, you would be entitled to claim a B.C. new housing rebate for owner-built homes
provided that you meet the same conditions, other than the maximum threshold amount of
\$450,000, that are in place for claiming the GST new housing rebate. The B.C. new
housing rebate would be equal to 71.43% of the provincial part of any HST paid on your
construction materials. Given that you have not paid the provincial part of the HST when
you purchased the land, the maximum rebate amount that you would be entitled to claim
is \$17,588, regardless of the fair market value of your house when you complete the
construction. You would also be entitled to claim a GST new housing rebate for the GST
paid on the purchase of the land and construction materials and the federal part of the HST
50
paid on the additional construction materials provided that the fair market value of the
house does not exceed \$450,000.

## 21. How would I claim the B.C. new housing rebate?

The B.C. new housing rebate in respect of the provincial part of the HST would be
administered by the CRA in a manner similar to the GST new housing rebate. Builders
would be able to pay or credit the B.C. new housing rebate to the purchaser of a new
house, just as they currently may pay or credit the GST new housing rebate. Individuals
would also be able to file an application for the B.C. new housing rebate directly with the
CRA if the builder does not pay or credit the rebate to the purchaser. A single rebate
application for both the B.C. new housing rebate and the GST new housing rebate will be
available on the CRA Web site by July 1, 2010.

Individuals claiming the B.C. new housing rebate for owner-built housing would file an
application directly with the CRA. A single rebate application for both the B.C. new housing
rebate and the GST new housing rebate for owner-built housing will be available on the
CRA Web site by July 1, 2010.

The time limits for claiming a B.C. new housing rebate are the same as those for claiming a
GST new housing rebate.

## 22. Under what circumstances would a purchaser be entitled to claim a PST

transitional new housing rebate?

51
An individual who purchases a newly constructed or substantially renovated house would
be entitled to claim a PST transitional new housing rebate where the construction or
substantial renovation of the house straddles the July 1, 2010 implementation date and the
HST is payable on the purchase (i.e., the sale of the house would not be grandparented
and both ownership and possession of the house transfer to the individual after
June 2010). See question 23 for the types of housing for which an individual would be
entitled to claim a rebate. The construction or substantial renovation of the house must be
at least 10% complete as of July 1, 2010 and the builder must certify the degree of
completion of the construction or substantial renovation as of July 1, 2010, in order to be
entitled to claim this rebate.

The individual would be able to obtain the rebate from the builder or from the CRA. The
rebate application for the PST transitional new housing rebate will be available on the CRA
Web site by July 1, 2010. Where the rebate application is submitted to the builder, the
builder is required to attach a valid provincial certificate to the rebate application when the
builder submits the application to the CRA.

See question 24 for more information with respect to the provincial certificate.

In some cases, builders would be entitled to claim a PST transitional new housing rebate,
see question 24.

23. Which types of housing qualify for the PST transitional new housing rebate
that would be available to purchasers who are individuals?

## An individual who purchases a newly constructed or substantially renovated single

detached house, semi-detached house, attached house (row house) or duplex (in each
case, the individual must purchase both the building and land portions of the housing)

52
would be entitled to claim a PST transitional new housing rebate where the construction or
substantial renovation of the housing straddles the July 1, 2010 implementation date and
the HST would be payable on the purchase (i.e., the sale of the housing would not be
grandparented – see the section above on grandparented sales of housing). The
construction or substantial renovation of the housing must be at least 10% complete as of
July 1, 2010. A PST transitional new housing rebate would not be available to purchasers of
mobile homes, floating homes and residential condominiums. A PST transitional new
housing rebate would also not be available for owner-built homes.

## 24. Under what circumstances would a builder be entitled to claim a PST

transitional new housing rebate?

## A builder of newly constructed or substantially renovated rental housing such as a single

detached house, semi-detached house, attached house (row house), duplex, residential
condominium unit, traditional apartment building or an addition to an apartment building
would be entitled to claim a PST transitional new housing rebate where the construction or
substantial renovation of the housing straddles the July 1, 2010 implementation date and
the HST would be payable in respect of a self-supply of the housing (i.e., possession of the
housing, or unit in the housing, is first given to an individual after the construction or
substantial renovation is substantially completed and after June 2010 for occupancy as a
place of residence). The construction or substantial renovation of the housing must be at
least 10% complete as of July 1, 2010 in order to be entitled to claim this rebate.

## A builder of a newly constructed or substantially renovated residential condominium unit or

complex would also be entitled to claim a PST transitional new housing rebate if the builder
sells the condominium unit or complex where the builder is required to pay the transitional
tax adjustment in respect of the unit or complex or the sale of the unit or complex is
subject to the HST – see the section below on the transitional tax adjustment for houses
53
and residential condominiums. In this case, the rebate would be available whether or not
the sale of the condominium unit or complex would be grandparented.

Provincial certificate

## As a condition of obtaining a PST transitional new housing rebate, a builder would be

required to attach a valid provincial certificate – a clearance certificate - to their first
rebate application and file the application with the CRA. The clearance certificate would be
obtained from the Province of British Columbia, would be issued where the builder has no
outstanding provincial tax debts and would generally be valid for one year from the date of
issuance unless revoked by the province. The clearance certificate would be used by the
CRA to process subsequent PST transitional new housing rebate applications filed by the
builder provided that the clearance certificate remains valid and has not been revoked. The
province would notify the CRA and the builder if it revokes a clearance certificate. Where a
clearance certificate is no longer valid, a builder would be required to attach a new
clearance certificate to any subsequent rebate application filed with the CRA.

25. How would the PST transitional new housing rebate be calculated?

The PST transitional new housing rebate would be based on the degree of completion of
the construction or substantial renovation of the housing as of the July 1, 2010
implementation date (i.e., 11:59 p.m. on June 30, 2010 and the estimated PST embedded
in the housing. With respect to housing that is 90% or more complete as of July 1, 2010,
there would be a 100% rebate of the estimated PST embedded in the housing. No rebate
would be available where the housing is less than 10% complete as of July 1, 2010.

## The PST transitional new housing rebate would be calculated as follows:

54
Degree of completion of the housing as of % of estimated PST that would be
July 1, 2010 rebated
Less than 10% 0%
Equal to or greater than 10% and less than 25% 25%
Equal to or greater than 25% and less than 50% 50%
Equal to or greater than 50% and less than 75% 75%
Equal to or greater than 75% and less than 90% 90%
Equal to or greater than 90% 100%

26. How would I determine the amount of the estimated PST embedded in the
housing?

The estimated PST embedded in the housing would be calculated by choosing one of the
following two methods:

• the floor space method – the total square metres of floor space
completed in the housing multiplied by \$60.00; or
• the consideration or fair market value method – 2% of the total
consideration paid for the housing or, in certain situations, 2%
of the fair market value of the housing.

## 27. A newly constructed single detached house is 90% or more complete as of

July 1, 2010. The written agreement of purchase and sale for the house is entered
into after November 18, 2009, and the agreement provides that both ownership
and possession will transfer to the purchaser who is an individual after June

55
2010. As a result, the HST would apply to the sale of the house. Would the
individual purchasing the house be entitled to claim a PST transitional new
housing rebate, a B.C. new housing rebate in respect of the provincial part of the
HST and a GST new housing rebate in respect of the federal part of the HST?

Yes, provided that all of the conditions for claiming each rebate are met. For a house with
a purchase price of \$350,000 (excluding the HST and any rebates), the individual would
pay the HST at 12% (\$350,000 × 12% = \$42,000). The individual would be entitled to
claim a PST transitional new housing rebate of \$7,000 (using the consideration or fair
market value method, \$350,000 × 2% × 100%), a B.C. new housing rebate of \$17,500
(\$350,000 × 7% × 71.43%) and a GST new housing rebate of \$6,300 (\$350,000 × 5% ×
36%), provided that all of the conditions for claiming each rebate are met.

## 27.1 A newly constructed single detached house is 80% complete as of

July 1, 2010. An individual enters into a written agreement of purchase and sale
for the house after November 18, 2009, and the agreement provides that both
ownership and possession will transfer to the individual after June 2010. As a
result, the HST would apply to the sale of the house. The individual is purchasing
the house for the purpose of renting it to a third party. Would the individual
purchasing the house be entitled to claim the PST transitional new housing
rebate?

Yes, provided that all of the conditions for claiming the PST transitional new housing rebate
are met. There would be no restriction that limits the rebate to situations where the house
is purchased for use as the primary place of residence of the individual or a relation of the
individual, as in the case of the B.C. new housing rebate or the GST new housing rebate.
Where all of the conditions are met, the individual would be entitled to claim the PST

56
transitional new housing rebate whether the house was acquired for the purpose of rental,
resale or personal use.

## 27.2 A newly constructed single detached house is 70% complete as of

July 1, 2010. A corporation enters into a written agreement of purchase and sale
for the house after November 18, 2009, and the agreement provides that both
ownership and possession will transfer to the corporation after June 2010. As a
result, the HST would not apply to the sale of the house. The corporation is not a
builder of the house. Would the corporation be entitled to claim the PST
transitional new housing rebate?

No, the PST transitional new housing rebate would not be available to the corporation. Only
individuals and certain builders would be entitled to claim an PST transitional new housing
rebate in respect of a single detached house provided that all of the other conditions for
claiming the rebate are met.

## 28. A newly constructed single detached house is 75% complete as of

July 1, 2010, and the written agreement of purchase and sale for the house was
entered into on or before November 18, 2009. Ownership and possession of the
house will transfer to the purchaser who is an individual, in accordance with the
agreement, after June 2010. Would the purchaser be entitled to claim a PST
transitional new housing rebate, a B.C. new housing rebate in respect of the
provincial part of the HST and a GST new housing rebate in respect of the federal
part of the HST?

If the sale of the house is grandparented (see the section above on grandparented sales of
housing), the HST would not apply to the sale of the house and the purchaser of the house
would not be entitled to claim a PST transitional new housing rebate. The purchaser would
57
not be entitled to claim a B.C. new housing rebate since the provincial part of the HST
would not be payable by the purchaser. However, the sale would be subject to the GST at
5% and the purchaser would be entitled to claim a GST new housing rebate in respect of
the GST paid at 5%, provided that all of the conditions for claiming the rebate are met.

## 29. I am the builder of an apartment building. Possession of an apartment in the

building is given to an individual, who is the first to occupy a unit in the building
as a place of residence, after the construction or substantial renovation is
substantially completed and after June 2010. Construction of the apartment
building is 40% complete as of July 1, 2010. The fair market value of the
apartment building (building and land) at the time of the self-supply is
\$1,500,000. Based on the consideration or fair market value method, what would
be the amount of the PST transitional new housing rebate that I would be entitled
to claim?

The amount of the PST transitional new housing rebate for the apartment building would
be calculated as follows:

Fair market value of the apartment building (building and land) at the time
of self-supply × 2% × 50%

where:

2% is the estimated PST based on the consideration or fair market value method;

50% is based on the degree of completion (40%) for the complex as of July 1, 2010 (i.e.,
equal to or greater than 25% and less than 50%, as per table in question 25)

58
The rebate amount would therefore be \$15,000 (\$1,500,000 × 2% × 50%).

30. I entered into a written agreement of purchase and sale for a newly
constructed residential condominium unit with a builder in December 2009. I will
occupy the condominium unit as my primary place of residence. I take possession
of the unit, in accordance with the agreement, in March 2011 and ownership in
May 2011. Would I be entitled to claim the PST transitional new housing rebate?

No. For residential condominium units, the PST transitional new housing rebate would only
be available to the builder of the condominium complex. Note that you may be entitled to
claim a B.C. new housing rebate in respect of the provincial part of the HST and a GST new
housing rebate in respect of the federal part of the HST payable on the sale, if all of the
conditions for claiming each rebate are met.

31. When would the PST transitional new housing rebate be available?

If you are using the floor space method, you would be eligible to file a rebate application
with the CRA after June 2010 and generally, before July 1, 2014.

If you are using the consideration or fair market value method, you would be eligible to file
a rebate application with the CRA no earlier than the day the HST is payable or the day you
are considered to have collected the transitional tax adjustment, as the case may be, and
generally before July 1, 2014.

Where a builder is unable to file the rebate application by July 1, 2014 due to extenuating
circumstances (such as a delay in completing the sale of the housing), the builder would be
able to file a request for an extension of the time to file the rebate application. The request
must be made in writing and received by the CRA before July 1, 2014.

59
The rebate application for the PST transitional new housing rebate will be available on the
CRA Web site by July 1, 2010.

## 32. What is the transitional tax adjustment?

The transitional tax adjustment would apply to grandparented sales of detached houses,
semi-detached houses, attached houses, residential condominium units and condominium
complexes. Given that the provincial part of the HST would not apply to grandparented
housing, the transitional tax adjustment is intended to approximate the amount of tax that
would have been paid in respect of such housing under the PST regime where the
construction of the housing straddles the July 1, 2010 implementation date. The
transitional tax adjustment would be considered to be collected by the builder and would
be included by the builder in the net tax calculation on the builder's GST/HST return.

33. What type of housing would be subject to the transitional tax adjustment?

The transitional tax adjustment would apply to grandparented sales of newly constructed
or substantially renovated detached houses, semi-detached houses, attached houses,
residential condominium units and condominium complexes, i.e., for which a written
agreement of purchase and sale was entered into on or before November 18, 2009, and
both ownership and possession are transferred to the purchaser, in accordance with the
agreement, after June 2010.

For housing other than residential condominium units or condominium complexes, the
builder would be considered to have collected the transitional tax adjustment amount if the
housing is less than 90% complete as of July 1, 2010.

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

33.1 Can a builder claim an ITC for the transitional tax adjustment?

Generally, no. For example, where a builder (referred to as the "original builder") sells a
house on a grandparented basis to an individual and would be required to account for the
transitional tax adjustment in its net tax calculation, the builder would not be entitled to
claim an ITC for the amount of the transitional tax adjustment. However, where an
individual purchases a house from the original builder on a grandparented basis and sells
the house before it is occupied by an individual for residential use, the individual (i.e., the
first reseller) would generally be entitled to claim an ITC, if the individual is a GST/HST
registrant and the sale of the house is subject to the HST. The ITC would be equal to 2% of
the consideration paid by the first reseller to the original builder which represents the
estimated PST and/or the transitional tax adjustment embedded in the price of the house.
Where the first reseller is not a registrant, the first reseller would generally be entitled to
claim a rebate equal to 2% of the consideration paid by the first reseller to the original
builder..

## See the sections above on resellers of housing.

34. How would the transitional tax adjustment be calculated for a house where
the sale is grandparented?

## The transitional tax adjustment for a grandparented sale of a newly constructed or

substantially renovated single unit house (other than a residential condominium unit or a
condominium complex – see question 40 for the rebate calculation for residential
condominiums) would be based on the total consideration payable for the house, as

61
determined for GST purposes, and the degree of completion of the construction or
substantial renovation of the house as of July 1, 2010. Recognizing that there is a greater
element of embedded PST in the price of a house whose construction or substantial
renovation is completed to a greater degree as of July 1, 2010, the transitional tax
adjustment rate decreases as the degree of completion increases.

The following chart provides the different rates of the transitional tax adjustment for
various degrees of completion of the construction or substantial renovation of the house as
of the July 1, 2010 implementation date (i.e., 11:59 p.m. on June 30, 2010).

## Transitional tax adjustment for a house (other than a condominium complex or a

residential condominium unit)

## Degree of completion of construction or Transitional tax adjustment rate as a

substantial renovation as of July 1, 2010 percentage of consideration
Less than 10% 2.0 %
Equal to or greater than 10% and less than 25% 1.5 %
Equal to or greater than 25% and less than 50% 1.0 %
Equal to or greater than 50% and less than 75% 0.5 %
Equal tom or greater than 75% and less than 0.2 %
90%
Equal to or greater than 90% 0.0 %

The transitional tax adjustment would be calculated on the consideration payable for the
grandparented sale of the housing, which would exclude the GST payable and any new

62
housing rebates. For purposes of calculating the transitional tax adjustment, the
consideration would be deemed to be equal to the fair market value where the
consideration payable for the housing is less than the fair market value of the housing on
July 1, 2010, as if the housing had been substantially completed on that date.

35. I am the builder of a single detached house the sale of which would be
grandparented. The consideration payable (excluding GST and any rebates) for
the house is \$450,000. The construction of the house is 85% complete as of
July 1, 2010. What would be the amount of the transitional tax adjustment I
would need to include in my net tax calculation?

Where the construction of the house is 85% complete as of July 1, 2010, the transitional
tax adjustment to be included in your net tax calculation would be equal to 0.2% of the
total consideration payable for the house, i.e., \$900 (\$450,000 × 0.2%).

36. I am the builder of a single semi-detached house the sale of which would not
be grandparented (i.e., the written agreement of purchase and sale was entered
into after November 18, 2009). Ownership and possession of the house will
transfer to the purchaser, in accordance with the agreement, in August 2010.
Would the transitional tax adjustment apply in this case?

No. The transitional tax adjustment would only apply if the sale of the house is
grandparented. In the circumstances described, the HST would be payable on the sale of
the house and the transitional tax adjustment would not apply.

## 37. I am a builder of a single detached house, the sale of which would be

grandparented, and I am required to account for the transitional tax adjustment.
How would I account for this tax?

63
You would report the transitional tax adjustment in your regular GST/HST return for the
reporting period that includes the day you transfer possession of the house to the
be reported in your regular GST/HST return will be provided in the coming months.

## 38. How would I determine the degree of completion of the construction or

substantial renovation of a house as of July 1, 2010, for purposes of the

The method used to determine the percentage of completion must be fair and reasonable.
For instance, it may be based on progress billings made before July 1, 2010, as a
percentage of the total consideration for the construction or substantial renovation of the
house.

In determining the percentage of completion, the cost of land and costs associated with the
acquisition and maintenance of the land, including related servicing costs, legal, accounting
and financing charges, real estate taxes, etc., are not to be included. More information on
this determination will follow in the coming months.

39. On May 11, 2009, I entered into a written agreement of purchase and sale
with a builder for a newly constructed single detached house. I will occupy the
house as my primary place of residence. Would I have to pay the transitional tax

No. The transitional tax adjustment is an amount that would be considered to have been
collected by the builder of the house. The builder would include the amount of the
transitional tax adjustment in its net tax calculation.

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40. How would the transitional tax adjustment be calculated for a grandparented
sale of a newly constructed or substantially renovated residential condominium
unit or condominium complex?

## The transitional tax adjustment for a grandparented sale of a newly constructed or

substantially renovated residential condominium unit or condominium complex would be
equal to 2% of the total consideration payable for the unit or complex, as determined for
GST purposes. The builder would be entitled to claim a PST transitional new housing rebate
if the construction of the condominium complex is at least 10% complete as of July 1, 2010
– see the section above on PST transitional new housing rebates.

The transitional tax adjustment would be calculated on the consideration payable for the
grandparented housing, which would exclude the GST payable and any new housing
rebates. For purposes of calculating the transitional tax adjustment, the consideration
would be deemed to be equal to the fair market value where the consideration payable for
the housing is less than the fair market value of the housing on July 1, 2010, as if the
housing had been substantially completed on that date.

## 41. I am the builder of a condominium complex that has 150 residential

condominium units. Sales of 100 residential condominium units in the complex
will be grandparented. The total consideration payable (excluding GST and any
rebates) for the sale of each of the grandparented units is \$500,000. Construction
of the condominium complex is 60% complete as of July 1, 2010. What would be
the amount of the transitional tax adjustment that I would need to include in my
net tax calculation?

The amount of the transitional tax adjustment would be equal to 2% of the total
consideration for each of the 100 grandparented units, i.e., \$10,000 for each unit
65
(\$500,000 × 2%). The transitional tax adjustment for a particular unit would be included in
your net tax calculation for the reporting period during which possession of the particular
unit is transferred to the purchaser. As the builder, you would be entitled to claim a PST
transitional new housing rebate in these circumstances – see the section above on PST
transitional new housing rebates. Since this is a condominium complex, the fact that the
construction of the condominium complex is 60% complete as of July 1, 2010 does not
have any impact on the calculation of the transitional tax adjustment.

42. I am the builder of a condominium complex. On May 28, 2008, I entered into
a written agreement of purchase and sale for the complex with another person
who will either sell or rent the units in the complex. Ownership of the
condominium complex transfers to the purchaser, in accordance with the
agreement, on June 1, 2012. The consideration (excluding GST and any rebates)
for the sale of the condominium complex is \$30 million. What would be the
amount of the transitional tax adjustment that I need to include in my net tax
calculation?

The transitional tax adjustment that would need to be included in your net tax calculation
would be equal to 2% of the total consideration for the condominium complex, i.e.,
\$600,000 (\$30,000,000 × 2%). As the builder, you would be entitled to claim a PST
transitional new housing rebate provided that the construction of the complex is at least
10% complete as of July 1, 2010 – see the section above on PST transitional new housing
rebates.

## 43. I am the builder of a condominium complex. I have pre-sold a number of

condominium units in the complex; however all of these written agreements of
purchase and sale were entered into after November 18, 2009 and are not
grandparented. Would I have to account for the transitional tax adjustment?
66
No. The transitional tax adjustment would not apply since the sales of the condominium
units are not grandparented.

## Application of the HST to new rental housing

44. How would the proposed HST apply to landlords who construct or
substantially renovate their own rental housing?

## Builders of newly constructed or substantially renovated rental housing, including single

houses, residential condominium units and traditional apartment buildings, who make a
supply by way of lease, licence or similar arrangement of the house or condominium unit—
or in the case of an apartment building, a unit in the apartment building—are considered to
have paid and collected tax under the self-supply rules for rental housing. Where the self-
supply occurs after June 2010, the HST at 12% would apply to the self-supply. The HST
would be calculated on the fair market value of the house, condominium unit or apartment
building, as the case may be, including the building and the land reasonably necessary for
the use of the housing as a place of residence for individuals.

The self-supply generally occurs at the later of the time construction or substantial
renovation of the rental housing is substantially completed and the time possession or use
of the rental property is given under a lease, licence or similar arrangement to an
individual who is the first to occupy it as a place of residence. In the case of an apartment
building, the self-supply occurs at the later of the time construction or substantial
renovation of the apartment building is substantially completed and the time possession or
use of a unit in the building is given to an individual who is the first to occupy a unit in the
building as a place of residence.

67
If a builder is required to pay tax on a self-supply before July 2010, the provincial part of
the HST would not apply. However, the GST at 5% would apply. For more information on
the self-supply of a rental property, see GST/HST Guide RC4052, GST/HST Information for
the Home Construction Industry.

## 45. I am the builder of a traditional apartment building. Construction of the

apartment building is substantially completed in June 2010 and, under a lease,
possession of a unit in the apartment building is given to an individual on
July 1, 2010. The individual is the first to occupy a unit in the building as a place
of residence. Would I account for the GST at 5% or the HST at 12% on this self-
supply?

You would be considered to have paid and collected the HST at 12% on the self-supply of
the apartment building. As the self-supply occurs at the later of the time construction of
the rental property is substantially completed and the time possession of a unit in the
apartment building is first given to an individual as a place of residence, the self-supply
occurs on July 1, 2010 at which time the HST at 12% would apply. The HST would be
calculated on the fair market value of the apartment building (i.e., building and land) at
that time.

## 46. I am a builder of a duplex. On June 1, 2010, under a lease agreement, I give

possession of one of the units in the duplex to an individual who is the first to
occupy a unit in the duplex as a place of residence. Construction of the duplex is
substantially completed on June 15, 2010. Under a lease, I give possession of the
other unit in the duplex on August 1, 2010, to an individual who occupies it as a
place of residence. Would I account for the GST at 5% or the HST at 12% for this
self-supply?

68
You would be considered to have paid and collected the GST at 5% on a self-supply of the
duplex. The self supply occurs on June 15, 2010 (i.e., the later of the time construction of
the rental property is substantially complete and the time possession of a unit is first given
to an individual for use as a place of residence). As such, the HST at 12% would not apply
on the self-supply.

## 47. I am leasing an apartment and I am not required to pay GST on my lease

payments. Following the implementation of the HST, would I be required to pay
the HST on my lease payments?

No, long-term residential rents are exempt from the GST and would also be exempt under
the HST.

## New residential rental property rebates

48. Would a new residential rental property rebate be available for the provincial
part of the HST?

The B.C. new residential rental property rebate would be available in respect of the
provincial part of the HST so that qualifying newly constructed or substantially renovated
rental properties across all price ranges would qualify for a maximum rebate amount of up
to \$26,250 per rental unit.

## Landlords who purchase newly constructed or substantially renovated residential rental

properties and pay the HST would be entitled to claim the B.C. new residential rental
property rebate. Landlords who build their own residential rental properties and are
required to account for the HST under the self-supply rules would also be entitled to claim
the rebate.

69
The B.C. new residential rental property rebate would be available for the same type of
residential rental properties for which a GST new residential rental property rebate is
currently available. Qualifying housing would include newly constructed and substantially
rental housing and long-term residential care facilities.

## Lease of land for residential use

The B.C. new residential rental property rebate would also be available for persons who
make exempt supplies of land used for residential purposes by way of lease (i.e., the lease
or rental of a residential lot, a site in a residential trailer park or a site in an addition to a
residential trailer park) and, as a result, would be required to self-assess and pay the HST
under the self-supply or change-in-use rules on the fair market value of the land. In this
case, the maximum rebate amount would be \$8,663. For multiple residential lots or sites in
a residential trailer park or an addition to a residential trailer park, the maximum rebate
amount of \$8,663 would apply to each lot or site.

49. How would the B.C. new residential rental property rebate for the provincial
part of the HST be calculated?

The B.C. new residential rental property rebate would be equal to 71.43% of the provincial
part of the HST paid on the purchase or self-supply of a newly constructed or substantially
renovated rental property, up to a maximum rebate amount of \$26,250 per qualifying
rental unit. This rebate would essentially reduce the provincial part of the HST to a rate of
2% on the first \$525,000 of the purchase price or, in the case of a self-supply, the fair
market value, of each qualifying rental unit.

70
In the case of traditional (non-condominium) apartment buildings, the rebate calculation
would be based on each qualifying residential unit in the apartment building.

In the case of land leased for residential use, the rebate would be equal to 71.43% of the
provincial part of the HST paid on the fair market value of the land under the self-supply or
change-in-use rules, up to a maximum rebate amount of \$8,663 for each qualifying lot or
site.

50. After June 2010, I will purchase a newly constructed triplex for \$900,000 not
including the HST or any rebates (the purchase price is equal to the fair market
value) and I will rent out each unit in the triplex to a different individual as a
place of residence. The duration of the rental arrangement for each unit will be
for one year. Assuming I would qualify for a B.C. new residential rental property
rebate in respect of the provincial part of the HST, what would be the rebate
amount that I would be entitled to claim for each rental unit where each unit is
identical in floor space and design (i.e., each unit has the same fair market
value)?

The HST payable on the purchase of the triplex would be \$108,000, composed of the
federal part at 5% (\$45,000) and the provincial part at 7% (\$63,000).

The B.C. new residential rental property rebate amount for the provincial part of the HST
would be equal to \$15,000 per rental unit (i.e., 71.43% of \$21,000 - the provincial part of
the HST for each unit that has a fair market value of \$300,000). A GST new residential
rental property rebate would also be available in respect of the federal part of the HST paid
on the purchase of the triplex. In this case, the rebate would be equal to \$5,400 per rental
unit (i.e., 36% of \$15,000 - the federal part of the HST for each unit that has a fair market
value of \$300,000).
71
51. Would all of the conditions for claiming the GST new residential rental
property rebate apply for purposes of the B.C. new residential rental property
rebate?

The rules and conditions for claiming a B.C. new residential rental property rebate would
mirror the rules and conditions for the GST new residential rental property rebate with the
exception of the rebate rate and the phase out provision for units whose fair market value
is more than \$350,000. The B.C. new residential rental property rebate would be available
across all price/fair market value ranges up to a maximum rebate amount of \$26,250 for
each qualifying unit and \$8,663 for each qualifying lot or site. Reference may be made to
GST/HST Guide RC4231, GST/HST New Residential Rental Property Rebate.

52. How would I claim the B.C. new residential rental property rebate?

The B.C. new residential rental property rebate in respect of the provincial part of the HST
would be administered by the CRA in a manner similar to the GST new residential rental
property rebate. Landlords would apply for a B.C. new residential rental property rebate by
filing a rebate application with the CRA. A single rebate application for both the B.C. new
residential rental property rebate and the GST new residential rental property rebate will
be available on the CRA Web site by July 1, 2010.

53. I will purchase a new residential rental property from a builder. Would the
builder of the rental property pay or credit the B.C. new residential rental
property rebate amount to me?

No. The B.C. new residential rental property rebate would not be paid or credited by the
builder to the purchaser of the property. The purchaser would need to apply for the rebate

72
directly with the CRA. This also applies in respect of the GST new residential rental
property rebate that would be available for the federal part of the HST.

53.1 A public service body purchases a newly constructed apartment building and
pays the HST on the consideration payable for the building. The public service
body is entitled to claim a GST new residential rental property rebate. Would the
public service body be entitled to claim a B.C. new residential rental property
rebate?

Where all of the conditions are met, the public service body would be entitled to claim a
B.C. new residential rental property rebate. However, if the public service body is entitled
to claim a B.C. public service body rebate in respect of the provincial part of the HST paid
to purchase the apartment building, the public service body would generally be entitled to
claim either the B.C. new residential rental property rebate or the B.C. public service body
rebate, whichever has the higher rebate rate.

## Builders' disclosure requirements

54. What would the disclosure requirements be for builders under the proposed
transitional rules for sales of newly constructed or substantially renovated
housing in B.C.?

## If a written agreement of purchase and sale for a newly constructed or substantially

renovated residential complex is entered into after November 18, 2009 and before July 1,
2010, the builder would be required to disclose in the written agreement whether the
provincial part of the HST applies to the sale and, if so, whether the stated price in the
agreement includes the provincial part of the HST, net of the B.C. new housing rebate and
the PST transitional new housing rebate, if applicable.

73
If the transaction is subject to the HST and the builder did not make a disclosure as
outlined above, the stated price in the written agreement would be deemed, under the
transitional rules, to include the provincial part of the HST. In such a case, the purchaser
would not be required to pay the provincial part of the HST in addition to the stated price
in the agreement.

## 54.1 Are there special disclosure requirements for resellers of grandparented

housing?

Yes. A reseller of housing that was purchased by the reseller on a grandparented basis and
sold, where the sale was not subject to the provincial part of the HST, would be required to
make the following disclosures in a written agreement for the sale of the housing:

## • the name(s) of the original builder(s) who constructed the

housing;
• whether the housing was purchased on a grandparented basis
or was relieved from the provincial part of the HST under the
resellers rule; and
• whether the provincial part of the HST applies to the sale and if
so, whether the purchase price stated in the agreement includes
the provincial part of the HST, net of any B.C. new housing
rebate, if applicable.

If the transaction is subject to the provincial part of the HST and the reseller did not make
the above disclosures, the stated price in the written agreement would be deemed, under
the transitional rules, to include the provincial part of the HST. In such a case, the

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purchaser would not be required to pay the provincial part of the HST in addition to the
stated price in the agreement.

## Sales of non-residential real property

55. What is the current PST treatment for sales of non-residential real property in
B.C.?

For information relating to the current application of the PST in B.C., you may visit the
Government of British Columbia Web site at www.gov.bc.ca., call 604-660-4524 if you are
located in Vancouver or 1-877-388-4440 toll-free elsewhere in B.C., or send your
questions by email to CTBTaxQuestions@gov.bc.ca.

56. Would the HST apply to sales of non-residential real property in B.C.?

The HST at 12%, composed of the federal part at 5% and the provincial part at 7%, would
generally apply to the sale of non-residential real property. Sales of real property that are
currently exempt under the GST rules would also be exempt for purposes of the HST. The
definitions in the Excise Tax Act that relate to real property and the CRA current policies
regarding the application of the GST to sales of real property would generally apply under
the HST.

57. I am an individual selling personal use vacant land and the sale is exempt
from GST. Would the sale of the land be exempt under the HST?

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Yes. The sale of the land would be exempt under the HST and you would not be required to
charge or collect the HST.

58. A corporation constructs commercial properties and sells them in the course
of its commercial activities. The corporation is registered for GST/HST purposes.
The corporation currently claims ITCs for the 5% GST that it pays on construction
inputs. Would the corporation be entitled to claim ITCs for the 12% HST payable
on its construction inputs?

Generally, yes. The corporation would be entitled to claim ITCs to recover the 12% HST
paid or payable on most purchases of construction inputs and operating expenses used to
construct the commercial properties. The corporation would claim ITCs for the 12% HST on
its regular GST/HST return, but would not claim any ITCs for any PST paid or owing. For
example, the corporation would claim ITCs for the HST paid or payable on:

## • a lease of commercial real property for use as an office and for

storage of equipment and materials;
• building materials;
• plumbing and electrical subcontracts;
• inspection services; and
• legal and accounting services.

In some cases, businesses may be required to recapture certain amounts claimed as ITCs.
Further information on temporarily restricted ITCs will be provided in the near future.

59. When would the HST apply to a sale of commercial real property?

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Generally, the HST would apply to a taxable supply by way of sale of real property (other
than housing) where both ownership and possession of the property are transferred to the
purchaser under the agreement for the supply on or after July 1, 2010.

60.When would the HST not apply to a taxable sale of real property?

Where either ownership or possession of the real property transfers before July 2010, the
HST would not apply to the sale. However, the GST at 5% would apply to the sale.

## 61. I am purchasing vacant land from a developer. In June 2010, I take

possession under a written agreement of purchase and sale for the land, though
title will not transfer to me until July 5, 2010. Would the HST apply to the sale?

No. Since possession of the land transfers to you before July 2010, the HST would not
apply. However, the GST at 5% would apply to the sale.

62. I enter into a written agreement of purchase and sale in May 2009 for the
taxable sale of commercial real property. Possession and ownership of the
property do not transfer under the agreement until July 2010. Would the sale of
the real property be subject to the HST?

Yes. As both ownership and possession of the real property transfer after June 2010, the
HST would apply to the sale. For sales of real property, other than housing, the date the
agreement of purchase and sale is entered into does not affect the application of the HST.
There is no grandparenting provision for sales of non-residential real property as there is
for certain sales of housing. For information on grandparenting in respect of housing, see
the section above on grandparented sales of housing.

77
63. I am an individual purchasing vacant land from a developer to build a home
for my family. Ownership and possession of the land will transfer to me in
August 2010. Would the HST apply to the sale?

Yes. Since both ownership and possession of the vacant land transfer to you after June
2010, the HST would apply to the sale. The fact that you are building a home on the
vacant land does not affect the application of the HST. However, you may be entitled to
recover some of the HST paid by way of a GST new housing rebate and a B.C. new housing
rebate. For information on the B.C. new housing rebate for owner-built houses, see the
section above on new housing rebates.

## 64. I am making a taxable sale of commercial real property to a corporation that

is registered for GST/HST purposes. Ownership and possession of the property
transfer after June 2010. Do I have to collect the HST on the sale?

No. While the sale would be subject to the HST, since the corporation (i.e., the recipient) is
registered for the GST/HST, the corporation would include the amount of the HST payable
on the sale of the real property in its regular GST/HST return if the property is used
primarily in its commercial activities. Otherwise, the corporation would report the HST on
Form GST60, GST/HST Return for Acquisition of Real Property.

## Leases of non-residential real property1

General rule

65. What is the current PST treatment for leases of non-residential real property?

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For information relating to the current application of the PST in B.C., you may visit the
Government of British Columbia Web site at www.gov.bc.ca, call 604-660-4524 if you are
located in Vancouver or 1-877-388-4440 toll-free elsewhere in B.C., or send your
questions by email to CTBTaxQuestions@gov.bc.ca.

66. Would the HST apply to leases of non-residential real property in B.C.?

The HST at 12%, composed of the federal part at 5% and the provincial part at 7%, would
generally apply to the lease of non-residential real property made by a GST/HST registrant.
Leases of real property that are currently exempt under the GST rules would also be
exempt under the HST. The definitions in the Excise Tax Act that relate to real property
and the CRA's current policies regarding the application of the GST to leases of real
property would generally apply under the HST.

67. A charity leases real property to a tenant and the lease is exempt from GST.
Would the lease of the property be exempt under the HST?

Yes. The lease of the real property would be exempt and the charity would not be required
to charge or collect the HST.

68. A landlord owns a shopping mall and leases space within the mall to retailers.
The landlord is registered for GST/HST purposes and currently claims ITCs for the
5% GST it pays on various business expenses, e.g., maintenance and repair
services. Would the landlord be entitled to claim ITCs for the 12% HST payable
on such expenses? Would a retailer, who is registered for GST/HST purposes, be
entitled to claim ITCs for the HST payable on the lease payments?

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Generally, yes. Both the landlord and the retailer would be entitled to claim ITCs to recover
the 12% HST paid or payable on the acquisition of property and services for consumption,
use or supply in the course of their respective commercial activities. The landlord and the
retailer would claim ITCs on their regular GST/HST returns, but could not claim any ITCs
for any PST paid or owing.

In some cases, businesses may be required to recapture certain amounts claimed as ITCs.
Further information on temporarily restricted ITCs will be provided in the near future.

69. When would the HST apply to a taxable lease of commercial real property?

The following rules apply based on the earlier of the date the consideration for the lease,
licence or similar arrangement becomes due and the date the consideration is paid without
having become due.

Lease payment due or paid without having become due on or after July 1, 2010

Generally, the HST would apply to any lease payment that becomes due, or is paid without
having become due, on or after July 1, 2010, to the extent that the lease payment is
attributable to a lease interval, or any part of a lease interval, that begins on or after July
1, 2010. However, the HST would not apply to a lease payment for a lease interval that
begins before July 2010 and ends before July 31, 2010.

Lease payment due or paid without having become due on or after May 1, 2010
and before July 2010

Generally, the HST would apply to any lease payment that becomes due, or is paid without
having become due, during the period after April 2010 and before July 2010, to the extent

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that the lease payment is attributable to a lease interval, or any part of a lease interval,
that begins on or after July 1, 2010 (other than a lease interval that begins before July
2010 and ends before July 31, 2010). In these situations, a lessor would be required to
account for the provincial part of the HST in its GST/HST return for the reporting period
that includes July 1, 2010. If eligible, a lessee would be entitled to claim any corresponding
ITC in its GST/HST return for the reporting period that includes July 1, 2010.

Lease payment due or paid without having become due after October 14, 2009
and before May 2010

Generally, the HST would apply to any lease payment that becomes due, or is paid without
having become due, during the period after October 14, 2009 and before May 2010, to the
extent that the lease payment is attributable to a lease interval, or any part of a lease
interval, that begins on or after July 1, 2010 (other than a lease interval that begins before
July 2010 and ends before July 31, 2010) if the lessee is not a consumer, e.g., a business
or public service body. In these situations, the non-consumer may be required to
self-assess (i.e., account for tax themselves rather than paying tax to the supplier) the
provincial part of the HST. The requirement to self-assess would generally apply only to:

## • non-consumers who acquire the property for consumption, use

or supply otherwise than exclusively in the course of their
commercial activities (e.g., a business that is making GST/HST-
exempt supplies, such as a financial institution);
• non-consumers who acquire the property for consumption, use
or supply exclusively in the course of their commercial activities
in circumstances where the property is subject to an ITC
restriction or recapture;

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• non-consumers who use simplified methods to calculate their
net tax (e.g., certain charities, public service bodies, and small
• selected listed financial institutions that use a special attribution
method to determine their net tax.

Persons liable to self-assess the provincial part of the HST under this rule would be
required to account for the tax in their GST/HST return for the reporting period that
includes July 1, 2010, if the due date of that return is before November 2010. In any other
case, the person would account for the tax in a form filed before November 2010. Further
information regarding this form will be available in the coming months and the form will be
available on the CRA Web site by July 1, 2010.

70. I lease warehouse space from a GST/HST registered person and the supply of
the space is subject to the GST. The lease payments are due, in advance, on the
first day of each month. I pay the lease payments on the same day they become
due. Which monthly lease payment would be the first payment on which I have to
pay the HST?

The first lease payment that would be subject to the HST would be the lease payment that
becomes due and is paid on July 1, 2010. The HST would also apply to all subsequent lease
payments.

71. I work downtown and I rent a parking space from the operator of a parking
lot that is located near my work. The operator of the parking lot is registered for
GST/HST purposes. At the beginning of each month, I pay the operator \$150.00
to park on the lot during that month. Would the HST apply to these payments?

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Yes. The HST would apply to the payment you make on July 1, 2010 for the month of July
and on all subsequent payments for parking.

72. I have a licence to use real property for the period of June 15, 2010 to July
15, 2010. The person supplying the licence is registered for the GST/HST and the
licence is taxable for GST purposes. The payment for the licence is due and paid
on June 15, 2010. Would any part of the payment be subject to the HST?

No. As the licence period begins before July 2010 and ends before July 31, 2010, the HST
would not apply to the payment. However, the GST at 5% would apply.

73. I enter into a lease agreement in May 2009 for the taxable lease of
commercial real property. The term of the lease commences July 1, 2010, and
requires monthly lease payments, payable in advance, on the first of the month
beginning July 1, 2010. I take possession of the property under the lease on July
1, 2010, and make the lease payment for the month of July on that date. Would
the lease of the real property be subject to the HST?

Yes. Regardless of when the parties entered into the lease agreement and when possession
is given, since each lease payment becomes due on or after July 1, 2010, is not paid
before that date and is wholly attributable to a period after June 2010, the lease payments
would be subject to the HST.

74. I lease real property from a GST/HST registered person for June and July
2010. The lease is subject to the GST and the lease payment for the two-month
period (the lease interval) is due and paid on June 1, 2010. Would any part of the
lease payment be subject to the HST?

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Yes, part of the lease payment would be subject to the HST. The lease payment becomes
due during the period after April 2010 and before July 2010 and is attributable to a period
that begins on July 1, 2010. Although the lease interval begins before July 2010, the lease
interval ends on July 31, 2010 (rather than before July 31, 2010). Accordingly, the HST
would apply to the portion of the lease payment that is attributable to the month of July,
i.e., 50% of the lease payment would be subject to the HST. The lessor would account for
the provincial part of the HST in its GST/HST return for the reporting period that includes
July 1, 2010. If eligible, the lessee would be entitled to claim any corresponding ITC in its
GST/HST return for the reporting period that includes July 1, 2010.

## 75. A GST/HST registered landlord receives a prepayment of rent on May 10,

2010 for a taxable lease of real property. The amount of the prepayment did not
become due before that date. The term of the lease is from July 1, 2010 to
December 31, 2010. When would the landlord be required to report the provincial
part of the HST that applies to the prepayment? If eligible, when would the
tenant be entitled to claim an ITC for the provincial part of the HST?

Since the lease payment is paid without having become due during the period after April
2010 and before July 2010 and is wholly attributable to a period beginning on July 1, 2010,
the HST would apply to the prepayment. The landlord would be required to account for the
provincial part of the HST in its GST/HST return for the reporting period that includes July
1, 2010. The landlord would account for the GST collectible on the lease payment in its
GST/HST return for the reporting period that includes May 10, 2010. If eligible, the tenant
would be entitled to claim any corresponding ITC for the provincial part of the HST in its
GST/HST return for the reporting period that includes July 1, 2010.

76. I lease pasture land from a grazing association every year for seven months
from April through October. The lease of the land is subject to the GST. I am
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engaged exclusively in commercial activities and the land is for use in those
activities. One lease payment is due and made on April 1 of each year for the
seven-month period. Would the association be required to collect the HST on the
lease payment I make on April 1, 2010?

No. The lease payment becomes due and is paid during the period after October 14, 2009
and before May 2010; therefore the association would not be required to collect the HST. If
you are not using a simplified method to calculate your net tax and you are acquiring the
land for use exclusively in your commercial activities and the land is not subject to an ITC
restriction or recapture, you are not required to self-assess the HST. However, the GST at
5% would apply. Lease payments that become due and are paid on April 1 of subsequent
years, however, would be subject to the HST.

77. The operator of a daycare centre leases an area in a building from a landlord
and uses the area in the course of making exempt supplies. The lease payment of
\$100,000 is payable and paid by the operator on January 1, 2010, and covers the
lease interval of January 1 to December 31, 2010. The lease of the property is
subject to the GST. The operator is not registered for GST/HST purposes. Would
the operator be required to self-assess the provincial part of the HST?

Yes. The lease payment becomes due and is paid during the period after October 14, 2009
and before May 2010. Given that the operator of the daycare is leasing the area in the
building for use in the course of making exempt supplies, the operator would have to self-
assess the provincial part of the HST. The HST would apply to the part of the lease
payment that is attributable to the period beginning on July 1, 2010 i.e., six out of the
twelve-month lease interval or 50% of the \$100,000 lease payment. The operator would
be required to self-assess the provincial part of the HST calculated on \$50,000 (50% of

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\$100,000) and account for the tax (7% of \$50,000 = \$3,500) in a form filed before
November 2010.

78. A small business using the Quick Method of accounting to calculate its net tax
for GST purposes, leases space in a building from a landlord and uses the space
exclusively in the course of its commercial activities. The lease payment is
payable and paid by the business on January 1, 2010, and covers the lease
interval of January 1 to December 31, 2010. The lease of the property is subject
to the GST. The business files monthly GST/HST returns. Would the business be
required to self-assess the provincial part of the HST?

Yes. The lease payment becomes due and is paid during the period after October 14, 2009
and before May 2010. Even though the business uses the property exclusively in
commercial activities, it uses a simplified method for calculating net tax and therefore
would be required to self-assess the provincial part of the HST on the part of the lease
payment that is attributable to the period beginning on July 1, 2010, i.e., six out of the
twelve-month lease interval or 50% of the lease payment. The business would be required
to account for the tax in its GST/HST return for the reporting period that includes July 1,
2010.

79. The operator of a trailer park, who is a GST/HST registrant, leases a site in
the park to an individual for the individual's personal use. The lease payment is
subject to the GST and is due in April 2010 for the six-month period from May 1,
2010 to October 31, 2010. The lease payment is not paid before it becomes due.
Would the operator be required to collect the HST? Would the individual be
required to self-assess the B.C. part of the HST?

86
No, the operator would not be required to collect the HST and the individual would not be
required to self-assess. Given that the lease payment becomes due during the period after
October 14, 2009 and before May 2010, the operator would not be required to collect the
HST for any part of the lease payment that is attributable to a period beginning on July 1,
2010. Given that the individual is a consumer, the individual would not be required to
self-assess the provincial part of the HST. However, the GST at 5% would apply to the
lease payment.

80. The operator of a trailer park, who is a GST/HST registrant, leases a site in
the park to an individual for the individual's personal use. The lease payment is
subject to the GST and is due on May 1, 2010, for the six-month period from May
1, 2010 to October 31, 2010. The individual paid the amount of the lease payment
on April 15, 2010. Would the operator be required to collect the HST? Would the
individual be required to self-assess the provincial part of the HST?

No, the operator would not be required to collect the HST and the individual would not be
required to self-assess. Although the lease payment becomes due in the period after April
2010 and before July 2010, the payment is made without becoming due by the individual
on April 15, 2010, which is after October 14, 2009 and before May 2010. The transitional
rules apply based on the earlier of the date the lease payment becomes due and the date
the lease payment is made without having become due. As such, the operator would not
be required to collect the HST for any part of the lease payment that is attributable to a
period beginning on July 1, 2010. Given that the individual is a consumer, the individual
would not be required to self-assess the provincial part of the HST. However, the GST at
5% would apply to the lease payment.

81. The operator of a trailer park, who is a GST/HST registrant, leases a site in
the park to an individual for the individual's personal use. The lease payment is
87
subject to the GST and is due on May 1, 2010 for the six-month period from May
1, 2010 to October 31, 2010. The individual paid the amount of the lease payment
on May 10, 2010. Would the operator be required to collect the HST? Would the
individual be required to self-assess the provincial part of the HST?

Yes, the operator would be required to collect the HST for part of the lease payment as the
lease payment becomes due during the period after April 2010 and before July 2010 and is
not paid before that period. Accordingly, the HST would apply to the part of the lease
payment that is attributable to the period beginning on July 1, 2010 i.e., four out of the six
months or 67% of the lease payment. The operator must account for the provincial part of
the HST in its GST/HST return for the reporting period that includes July 1, 2010.

Progress payments

82. Would the HST apply to progress payments made for the construction of real
property in B.C.?

The HST at 12%, composed of the federal part at 5% and the provincial part at 7%, would
generally apply to progress payments made under contracts for the construction,
renovation, alteration or repair of real property where the progress payment becomes due
after October 14, 2009 to the extent that the payment can reasonably be attributed to
property delivered or services performed on or after July 1, 2010. To the extent that the
progress payment can reasonably be attributed to property delivered or services performed
before July 2010, the payment would not be subject to the provincial part of the HST.

The provincial part of the HST would not apply to a progress payment that becomes due or
is paid on or before October 14, 2009, regardless of when property is delivered or services
are performed. If a progress payment becomes due or is paid without having become due

88
after October 14, 2009 and before July 2010, the payment would be considered to become
due on July 1, 2010, and not to have been paid before that date. To the extent that the
progress payment is attributable to property delivered or services performed on or after
July 1, 2010, the HST would be payable on July 1, 2010. In this case, a supplier would be
required to account for the provincial part of the HST in its GST/HST return for the
reporting period that includes July 1, 2010. If eligible, the recipient would be entitled to
claim any corresponding ITC for the provincial part of the HST in its GST/HST return for the
reporting period that includes July 1, 2010.

## In cases of written contracts, if the construction, renovation, alteration or repair is

substantially completed (90% or more) before June 2010, the construction would be
considered to be substantially completed on June 1, 2010. Any consideration or part of the
consideration for the contract, other than an amount that is a holdback, that has not been
paid or become due on or before July 31, 2010, would be considered to become payable on
that date.

83. On January 15, 2009, a corporation entered into a contract to construct a six
storey building. Construction began on July 1, 2009 and is expected to be
completed on August 15, 2010. A progress payment is due on July 5, 2010, for
the work completed up until the end of June 2010. Would the HST apply to the
progress payment?

No. Although the progress payment becomes due on July 5, 2010, the payment is
attributable to property delivered and services performed before July 2010. As such, the
HST would not apply to the progress payment. However, the GST at 5% would apply.

## 84. On March 10, 2010, a corporation entered into a contract to construct a

parking garage. Construction began on July 1, 2010, and is expected to be
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completed on October 1, 2010. A progress payment is due on August 1, 2010, for
the work completed up until the end of July 2010. Would the HST apply to the
progress payment?

Yes. The HST would apply to the progress payment, or that part of the payment, that is
attributable to property delivered and services performed on or after July 1, 2010. If any
part of the progress payment can reasonably be attributed to property delivered or
services performed before the construction actually began (July 1, 2010), the HST would
not apply to that part of the progress payment. However, the GST at 5% would apply.

85. My company is renovating a house and the first three progress billings are
due as follows: \$20,000 on April 15, 2010; \$15,000 on June 1, 2010; and \$10,000
on August 1, 2010. The agreement for the renovation was entered into on
November 1, 2009. Would the HST apply to these progress payments?

Yes, the HST would apply to some of the progress payments to the extent that the
payments are attributable to property delivered or services performed on or after July 1,
2010. The date the agreement is entered into by the parties does not affect the application
of the HST to progress payments. If the \$20,000 progress payment is reasonably
attributable to property delivered and services performed before July 2010, the HST would
not apply to this payment; however, the GST at 5% would apply.

## If 40% of the \$15,000 progress payment (i.e., \$6,000) is reasonably attributable to

property delivered and services performed before July 2010, the HST would not apply to
that part of the payment. However, GST at 5% applies to 40% of this payment (GST = 5%
of \$6,000 = \$300). Since 60% of the \$15,000 progress payment (i.e., \$9,000) is
reasonably attributable to property delivered and services performed on or after July 1,

90
2010, the HST at 12% would apply to 60% of the payment (HST = 12% of \$9,000 =
\$1,080).

If the \$10,000 progress payment is wholly attributable to property delivered and services
performed on or after July 1, 2010, the HST at 12% would apply to this payment.

## 85.1 On May 21, 2010, the construction of a parking garage is substantially

complete. A progress payment of \$10,000 is due and paid on August 15, 2010.
\$4,000 of this progress payment is reasonably attributable to property delivered
and services performed on or after July 1, 2010. Would the HST apply to this
progress payment?

Yes. The provincial part of the HST would apply to the part of the progress payment that is
attributable to property delivered and services performed on or after July 1, 2010 i.e.,
\$4,000. For purposes of determining when the provincial part of the HST would be payable,
the construction would be considered to be substantially completed on June 1, 2010, given
that the construction was substantially completed on May 1, 2010. As a result, the
provincial part of the HST (i.e., 7% of \$4,000 = \$280) would be payable on July 31, 2010.
The federal part of the HST payable in respect of the progress payment (i.e., 5% of
\$10,000 = \$500) would be payable on June 30, 2010 in accordance with the current GST
rules.

Holdbacks

86. Would the HST apply to holdbacks for the construction of real property in
B.C.?

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If, in accordance with federal or provincial law or a written agreement for the construction,
renovation, alteration or repair of real property, a purchaser keeps a part of a progress
payment as a holdback pending satisfactory completion of the work, the HST at 12% would
generally apply to the holdback to the extent that the progress payment can reasonably be
attributed to property delivered or services performed on or after July 1, 2010, provided
that the progress payment becomes due or is paid without having become due after
October 14, 2009. The GST/HST on the amount of the holdback, or any part thereof,
becomes payable on the earlier of the day the purchaser pays the holdback and the day
the holdback period expires. The GST/HST is collectible by the supplier on the earlier of the
above dates even if the supplier already issued an invoice for the holdback and charged the
GST/HST on this amount. The provincial part of the HST would not apply to a holdback that
is withheld from a progress payment that is attributable to property delivered and services
performed before July 2010 even if the holdback is paid on or after July 1, 2010.

## 87. On August 1, 2010, a final progress payment of \$25,000 less a holdback

amount is due for the construction of a house on land owned by an individual.
70% of the progress payment is reasonably attributable to property delivered
and services performed after June 2010. In accordance with the written contract
for the construction of the house, the individual only pays \$5,000 and keeps
\$20,000 (10% of the value of the contract) as a holdback pending satisfactory
completion of the work. Would the HST apply to the holdback amount?

Yes, the HST would apply to a part of the holdback amount. Since 70% of the progress
payment is reasonably attributable to property delivered and services performed after June
2010, 70% of the progress payment of \$5,000 would be subject to the HST at 12%. GST
at 5% applies to 30% of the \$5,000 progress payment. Given that the holdback is retained
from this progress payment, the HST would apply to 70% of the holdback amount i.e.,

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70% of \$20,000 = \$14,000. The amount of the GST on the holdback i.e., 5% of \$6,000 =
\$300 and the amount of the HST on the holdback i.e., 12% of \$14,000 = \$1,680, would be
payable on the earlier of the day the purchaser pays the holdback amount and the day the
holdback period expires.

88. When I purchase a house, I incur additional costs such as legal fees, home
inspection fees and real estate agent commission fees. Currently, I am required
to pay GST of 5% in respect of these fees. Would these fees be subject to tax at
12% under the HST?

Yes. Under the HST, you would be required to pay the HST at 12% for taxable goods and
services that you acquire in relation to the purchase of your house where these goods and
services are currently subject to the GST at 5%. The HST would generally apply to these
goods and services even if the sale of the house is grand parented or exempt from the tax
(e.g., the house was previously occupied by an individual as a place of residence).

## 89. Would a construction business that is registered for GST/HST purposes

recover the HST it pays on business expenses?

Generally, yes. If eligible, businesses that are GST/HST registrants would claim ITCs to
recover the HST at 12% paid or payable on most purchases and operating expenses for
use in their commercial activities, in the same manner that they currently do for the GST.
Businesses would claim ITCs on their regular GST/HST returns, but would not claim any
ITCs for any PST paid or owing. For example, a contractor who is registered for GST/HST
purposes and engaged in the business of providing home renovation services would claim
ITCs for the HST paid or payable:

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• on a lease of commercial real property for use as an office and
for storage of equipment and materials;
• on building materials;
• to plumbing and electrical subcontractors;
• on inspection services, and
• on legal and accounting services.

In some cases, businesses may be required to recapture the provincial part of certain
amounts claimed as ITCs. Further information on ITC restrictions will be provided in the
near future.

Enquiries by telephone

## Questions relating to this notice or technical enquiries on the GST/HST:

1-800-959-8287
General enquiries on the GST/HST: 1-800-959-5525 (Business Enquiries)
If you are located in Quebec: 1-800-567-4692 (Revenu Québec)

All technical publications on GST/HST are available on the CRA Web site at
www.cra.gc.ca/gsthsttech.

Footnotes 1- [In this document, references to a lease include a license or similar arrangement.

## Date Modified: 2009-12-17

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Summury of GST/HST inBC
British Columbia will harmonize its provincial sales tax (Social Services Tax, aka PST)
with the Federal goods and services tax (GST) effective July 1, 2010. The Consumption
Tax Rebate and Transition Act, which eliminates the PST and prepares BC for the HST,
was passed in the BC legislature on April 29, 2010.

The current PST rate in BC is 7%, which, when combined with the GST results in a
harmonized sales tax (HST) rate of 12%.

The implementation of HST in BC will be good for the economy, which will be good for
job-seekers and consumers. It removes a consumer tax (PST) which is costly for
employed person) which is not required to register to collect GST has to register to collect
PST if it sells or provides any amount of a product or service which is subject to PST.
who must report on and remit the tax, and too often, lawyers and the courts are brought
into the picture because the Social Services Tax Act has many parts that are open to
interpretation. The implementation of the HST eliminates an entire level of bureaucracy,
which is always a good thing!

There will be a slight increased cost to consumers to start, but because this is a
consumption tax, those who spend the most will pay the most. Those with low incomes
will be affected the least, because they spend the least, and a higher proportion of items

95
purchased by low-income people are not subject to HST, such as basic groceries.

Another advantage of going to HST is that tax will no longer be payable on most used
goods purchased privately. However, used vehicles, aircraft and boats purchased
privately (not from an HST registrant) would still be subject to provincial sales tax, which
is being increased from 7% to 12%. Almost everything that is subject to PST when
purchased new is also subject to PST when purchased used. Exceptions to this are used
clothing or footwear priced at less than \$100, and certain used manufactured homes.
Most people are not aware that the Social Services Tax Act requires them to remit the tax
to the government when they buy used goods privately, or when they purchase
something from an out of province seller. We would guess that most people don't remit
the PST on this type of item, and are therefore in contravention of the Social Services Tax
Act.

Businesses which are registered to collect GST or HST can claim input tax credits to
recover all of the GST or HST that they have paid. The change to HST will mean a
significant savings and boost in productivity for businesses in BC, because:

## they will no longer have to pay PST

they will no longer have to prepare PST remittances
they will save on consulting costs - the PST rules are very complicated, and frequently
require professional advice in their interpretation
employees will spend much less time trying to find the answers to PST questions
PST audits will be eliminated

96
The GST/HST rates are as follows:
On or after January 1, 2008
GST rate is 5%
HST rate is 13% (5% federal part and 8% provincial part)
Before January 1, 2008 and after June 30, 2006
GST rate was 6%
HST rate was 14% (6% federal part and 8% provincial part)
Before July 1, 2006 and after December 31, 1990
GST rate was 7%
Before July 1, 2006 and after March 31, 1997
HST rate was 15% (7% federal part and 8% provincial part)

## Harmonized Sales Tax: Creating Jobs, Lowering Prices

 B.C. will have the lowest provincial personal income taxes in Canada for individuals earning up to \$118,000.
 Since 2001, the B.C. Government has reduced taxes more than 120 times, benefiting both business and the
people of British Columbia.

97
 For the majority of taxpayers, your B.C. Government has reduced provincial income taxes by at least 37 per
cent and an additional 325,000 people no longer pay any B.C. income tax.
 An individual earning \$15,000 now pays \$420 less in taxes;
 An individual earning \$20,000 now pays \$605 less in taxes;
 An individual earning \$40,000 now pays \$990 less in taxes;
 An individual earning \$50,000 now pays \$1,400 less in taxes;
 An individual earning \$60,000 now pays \$1,820 less in taxes;
 An individual earning \$70,000 now pays \$2,240 less in taxes.
 Your B.C. Government will increase the basic personal income tax credit by 17 per cent to \$11,000 on
January 1, 2010.
 Your B.C. Government increased the Low Income Climate Action tax credit to low-income families by 5 per
cent on July 1, 2009. That means low-income families will be eligible for \$105 per adult and \$31.50 per
child annually. This new benefit will put an additional \$15 million a year back in the pockets of the families
and individuals who need it most.
 Your B.C. Government will introduce a B.C. HST credit, paid quarterly with the GST and Low Income
Climate Action tax credits to offset the impact of the HST on those with low incomes.
 In 2008, every B.C. resident received a \$100 climate action dividend cheque to help British Columbians
make smart choices to reduce their carbon footprint
 Introduced the Rental Assistance Program in 2006, providing rent payment assistance to more than 8,200
low-income, working families with children whose combined income is less than \$35,000. The average
monthly rental assistance provided to these families is about \$350.
 The Shelter Aid for Elderly Renters (SAFER) program has been improved and expanded, with 15,700
seniors' households – that's 3,700 more households than 2001 – receiving an annual rental subsidy of \$1,800.
 Your B.C. Government has increased the home owner grant by \$100 and eliminated the threshold for low-
income seniors, veterans and persons with disabilities. Your B.C. Government is providing a Northern and
Rural Homeowner benefit of up to \$200 for homeowners in the area of the province outside the Capital
Regional District, Greater Vancouver Regional District and Fraser Valley Regional District for the 2011 tax
year.

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 With the improvements your B.C. Government is making to the MSP Premium Assistance Program, those in
the greatest financial need will actually come out ahead.
 For example, a senior couple with an income of \$35,000 will see their annual premium cost fall by more
than \$200. A family of four earning \$30,000 will see their annual costs reduced by more than \$250. In total,
approximately 180,000 British Columbians will see their premium costs reduced or eliminated.
 Healthy Kids Program provides \$700 per child, per year for additional dental and eye care on top of MSP
 After Fair Pharmacy Care was introduced in 2003, 300,000 families received more support than they did in
2001; under this program, the vast majority of British Columbians now pay the same or less for their
prescription drugs.
 Your B.C. Government provides a Child Care Subsidy Program to assist low- and middle-income families
earning up to \$38,000 with the costs of child care.
 On average, a family receiving the child care subsidy would receive \$5,400 per child over the course of a
year.
 Your B.C. Government created a new, temporary property tax deferment program for those British
Columbians experiencing serious financial difficulties due to current economic conditions.
 Your B.C. Government permanently removed the tolls on the Coquihalla Highway saving travelers time and
money. A passenger vehicle making a round trip twice a month will save \$480 a year, and a commercial
truck making a round trip once a week will save \$4,800 a year.
(Source:http://www.gov.bc.ca/yourbc/tax_families/tf_taxpayers.html?src=/taxpayers/tf_taxpayers.html)

## Sales taxes in British Columbia

PST
Currently, the Provincial Government of British Columbia collects a Social Service Tax as
known as the Provincial Sales Tax (PST) of 7% on most of the goods and services. The
main difference with the GST is its taxable base since the PST taxation is done disregarding

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if the good or service is for final use or not (at the difference of the GST taxing only goods
and services for final use.

## Main tax exemptions

 unprocessed food
 restaurant
 fuel
 children sized clothes and footwear

Tax revenue
The PST revenue is estimated at 5.087 Billions for the 209/2010 exercise from which 2
Billions is directly paid by the business sector. It represents ~13% of the BC government
budget.
HST
The BC government has announced on July 23rd, 2009, its intention to replace, by July
1st, 2010, the PST by a Harmonized Sales Tax (HST) combining the GST with a provincial
tax following the same rule than the GST.
Rationale
The PST being a retail tax, the business sector is subject to a 7% PST on most of its input,
so it is put at a competitive disadvantage with business of other jurisdiction not subject to
such taxation. Transferring this tax to the consumer favour both the exportation, and
investment in productivity and according several study is a more efficient taxation. It could
also disfavor the labour intensive service industry (like hairdresser or hospitality services),
where inputs are marginal.

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PST versus HST revenue

While the PST revenue is estimated \$5.083 billion, for the 2009/2010 exercise, the HST
revenue could generate significantly more revenue, \$6 billions according to the projection
below,
Several source concurs to estimate the 5% GST revenue for British Columbia of ~\$5 Billions (or a tax base at
~100 billion after the current GST exemption concerning the public sector), this revenue can be multiplied by
7%/5%, taking account the difference rate, between current GST and proposed additional 7%, to estimate the
HST provincial revenue, the taxable base being the same.
This is not taking account the additional windfall of \$1.6 Billion provided by the Federal
Government, as a consequence of the HST adoption, and collection cost saving estimated
at \$30 millions.

Mitigation measure
In order to be revenue neutral, the BC government could explore several avenues: The
Memorandum agreed between the provincial and the federal government, gives the former
the flexibility to
 Adjust the tax rate (after a 2 years period, and currently fixed at 7%), according to the above projection, the
tax base change could provide room for a decrease of the tax rate of more than 1 point, to keep revenue
neutral.
 exempt some service and good in the limit it doesn't affect more than 5% of the tax base
The Memorandum seems to prefer the second path by suggesting exemption of Motive
fuel, Children's Clothing and footwear, Children car seats, Feminine hygiene and Books.

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Beside it, and following the #rationale justifying the introduction of the HST, the BC
government, following the example of the Ontario government, could choose to reduce
other tax, reputed inefficient in economic term like personal tax.

Critics

Rather than decrease the rate of the HST across the board, the government has chosen to
favour some special interest group industries, calling several comments
General remark
One will note that all those discretionary exemption defeat one purpose of the HST, which
is tax harmonization, with cost saving achieved by red tape reduction.
The HST shift benefits mostly to the capital intensive industry which is mining and forestry
in BC. The government having chosen to exclude most of labor intensive service industry of
HST tax relief, the tax shift appears to favor the rural BC interior over the urban area
riding, and the exemption on motive fuel could be a consequence of this choice. In other
word, the tax shift could favor declining legacy industry representing a declining share of
the BC GDP.
However, the government has adopted the following policy on goods taxation:
 tax credit on demand elasticity non directly function of the family income, like heating fuel
 Provincial HST exemption on demand elasticity directly function of the family income, like children
garments.

## HST and Green agenda

In 2008, BC has introduced a Carbon tax. In the meantime it plane to exempt motive fuel
of the 7% HST. However the soft transportation mode like bike, bike part and service,
currently exempted of PST will be subject to the 7% under the HST umbrella. This lack of

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readability in the political agenda pursued by the government in regard of the climate
action has been called "pretzel logic" by a Province commentator.
Some could explain the reasoning as a way to avoid too many taxes for the motive fuel,
already subject to the carbon tax, but then the reasoning should also apply to heating fuel
what the BC government is short to do.
Fuel Demand elasticity
it is known the demand elasticity, as a function of price, for motive fuel is very light, so
there was a priori little incentive for a government to renounce to the taxation on such
item by means of across the board taxes exemption, restraining his ability to reduce price,
by means of tax reduction, on sector more sensible to pricing. Whether final price of
motive fuel is an issue for economic competitiveness, the provincial government had a way
to mitigate the effect of the HST introduction by reducing the motor fuel tax accordingly.
Whether the final price is a social issue, the government can also act by a tax credit,
leaving choice to consumer to either use it to offset the tax effect, or eventually to shift to
less dependable mode.

## HST and Sport Agenda

In 2009/2010, the Government spend \$70 million in the promotion of healthy living and
sport, but the introduction of HST will translate by a new taxation of 7% for numerous of
sport activities:
 biking
 fitness and gym club
 ski passes
What could largely conceal the effort of the ministry of healthy living and sport?

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HST and Social issue
HST will affect the heating fuel (previously exempted by the PST), and government plane
to provide a tax credit to mitigate the effect of it.
other items, like children's clothes and footwear, currently exempted of PST will be not
affected by the HST either, though that the government could have choose to mitigate the
HST effect by a tax credit like in the case of motive fuel, which could have been more
favorable to low income families which spend less on garment than rich families.

## HST and Housing

Renting
Under the GST rule, rent are exempted, so they will be also under HST rule like it was
under PST rule.
Purchase of existing home are exempted of GST (and so will be of HST) while purchase of
new home are subject to a GST rate reduced of 36% if the purchase price is below \$350
000 (paying effectively a tax rate of 3.2%). Under PST rule, purchase of new home is
exempted of tax. Under BC HST rule, up to \$200000 of the provincial part of the HST could
be refunded (making virtually tax free the purchase of new home under \$400 000).
Nevertheless realtors and home appraisals service will be subject to full HST, whereas they
were only subject to GST. It could be considered the change could have little effect on the
market:
• Realtor fees are traditionally paid by the seller, and tax increase will only affect its potential benefit (that is
assuming the cost of home is fixed by market).
• Cost of Appraisal service can be considered as negligible in a traditional home purchase.
HST effect on new home pricing is expected to be mitigated by suppression of the PST on
the construction inputs.

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New homes in B.C. are subject to the GST, and also carry an estimated two per cent embedded tax as a result of the
PST paid on most construction materials.
Under the proposed Harmonized Sales Tax, new homes will be subject to the HST but the embedded PST will be
eliminated because builders will be able to recover the tax paid on materials through input tax credits. Used homes
will
not be subject to the HST. An essential part of the BC HST will be a tax rebate for new homes. A rebate of up to
\$20,000 will ensure that purchasers of new homes up to \$400,000 do not pay more tax due to harmonization than is
currently embedded in the price of a new home. New homes above \$400,000 will be eligible for a \$20,000 rebate.
New home sales will be subject to the HST
Sales of used homes will not be subject to HST.

BC Property Tax
All property owners are taxed annually based on the assessed values as determined by the
BC Assessment Authority. The BC Assessment Authority produces annual property
assessments based on the market value of the real estate as at July 1st in the previous
year. Property assessments are determined using standard real estate valuation
approaches; direct comparison, cost and income approaches. The BC Assessment Authority
also determines the physical condition, reflecting any changes after the valuation date, and
the actual use(s) to apply the correct property tax classification(s) for each property as at
October 31st in the previous year.
Property owners receive their annual property assessment notices in the first week of
January. The property owner has until January 31st to file an appeal with the Property
Assessment Review Panel. There is no fee to file an appeal to the Property Assessment
Review Panel. A third party may also file an appeal against a property assessment notice.
The BC Harmonized Sales Tax in a Nutshell – A Quick Overview of the B.C. HST 12% Tax and How It
Influences New Home Buyers of Real Estate

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The Harmonized Sales Tax (also known as the new BC HST) is 12% tax applicable to most goods and
services, including new homes, real estate, and property.

The new B.C. HST 12% Tax is the combination of the Federal Goods and Services Tax (5% GST) and the
Provincial Sales Tax (7% PST).

Implementation of the BC Harmonized Sales Tax will take place on July 1, 2010.

The BC HST is NOT a 12% real estate tax, but a provincial harmonized tax on most goods, services and
consumer products including new homes.

Currently, new BC and Vancouver homes are subject to 5% GST (federal tax) in which first time
homebuyers or investors can receive GST rebates. This 5% GST will be replaced with the higher 12%
B.C. Harmonized Sales Tax (HST), a 7% difference in taxes on the total purchase price of a new British
Columbia home or property.
The B.C. HST program will give partial rebates for new BC homes priced up to \$400,000. The
government will give these homebuyers a partial five per cent BC HST rebate on the provincial tax side
which makes any new B.C. home or Vancouver property \$400,000 or less no more expensive than it is
today.
rebate of \$20,000, but will see the purchase price above that level subject to the extra five per cent tax rate
system.

The British Columbia Harmonized Sales Tax of 12% HST is also applicable to any costs and fees
associated with your property/home purchase including legal/notary fees, commissions and other closing

106
costs.
The BC HST transition rules are unclear at this time. It is unknown whether new Vancouver home sales
contracts written before July 1, 2010 but completed after the harmonized sales tax HST launch date will
be subject to the current 5% GST only or the entire 12% HST new tax.
The cost of new home ownership will increase significantly in British Columbia due to the new BC HST
tax of 12%. Not only will your new home or real estate cost more up front, but the 12% HST harmonized
sales tax is also applicable to such things like strata fees, residential heating fuel, commercial rents, smoke
detectors, fire extinguishers, repairs, cable TV, internet, electricity, gas, renovations, painting and other
professional services.

## Some BC Real Estate HST Numbers and How It Affects You

Scenario 1: Based on a purchase price of \$600,000 for a new BC or Vancouver home, the homebuyer would pay a
total of \$72,000 in BC HST taxes (12% on \$600,000). With the homebuyer HST rebate for purchases above
\$600,000, the homebuyer would receive the \$20,000, thus reducing their purchase cost to \$52,000 in taxes for a
total of \$652,000. Currently, the 5% GST applicable to the same home would cost only \$30,000 (a difference of
\$22,000).
*This does not include the HST applicable to closing fees.
Scenario 2: If a BC homebuyer wanted to purchase a new Vancouver home costing \$800,000, the total 12% HST
hit would be \$96,000. The partial HST rebate of \$20,000 (maximum allowed) will reduce this to \$76,000, making
the final purchase price at \$876,000 plus property transfer taxes and other closing costs. Before July 1, 2010, a new
home would be subject to only 5% GST which is \$40,000 on an \$800,000 property. With the new BC harmonized
sales tax, a BC homebuyer would pay \$36,000 more for the same home after implementation of the HST tax. *This
also does not include the HST applicable to closing costs. (Source: http://www.vancouver-real-estate-
direct.com/HST/index.html)

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The BC HST Rebate – Partial British Columbia Harmonized Sales Tax Rebate on New B.C. and Vancouver
Housing and Real Estate

Although the BC government and Ministry of Finance indicates that there is currently the 5% GST applicable to
new construction homes and BC real estate for sale in addition to 2% PST that is embedded within the cost of new
homes on construction materials (as Vancouver and BC home builders can get the full PST rebate currently), the
12% HST or BC Harmonized Sales Tax is applicable to any new housing. The BC government has stated that there
will be a partial HST rebate available to homebuyers that are equal to 5% of the purchase price up to a maximum
BC HST rebate amount of \$20,000 (twenty thousand dollars). As the Ministry of Finance indicates the ‘hidden’ 2%
PST tax on construction materials for new homes built in BC right now, they argument is that with the 5% HST
rebate on new homes in Vancouver/BC, homebuyers purchasing new property under \$400,000 will be paying the
same amount before and after July 1, 2010. Essentially, the current 5% GST + 2% PST embedded into current
Vancouver new homes is equal to the 12% HST – 5% HST rebate on homes less than \$400k purchased after July
1st. However, BC homebuyers looking to purchase new Vancouver property over \$400,000 will not be so lucky, as
they will be taxed at a rate that is 7% higher than the current GST/PST system because of the flat \$20,000 HST
rebate allowable by the government. The B.C. Ministry of Finance has indicated that about half of new BC and
Vancouver home construction is sold for more than \$400,000. Therefore, half of new Vancouver homebuyers will
not see a difference in their final purchase cost after the 5% HST rebate is applied, while the other half of new
home buyers will see a significant 7% increase in their purchase price even with the \$20,000 BC HST harmonized
sales tax rebate. There is currently no form or indication of how the BC harmonized sales tax rebate or HST rebate
can be claimed at this time, but further information will be released next year.
The new BC HST will apply to new home sales. However, purchasers of new
Homes will be able to claim a rebate equal to 5% of the purchase price up to a maximum of \$20,000. The
government’s stated intent is that new homes up to \$400,000 will not be subject to any additional tax burden than
under the current regime. It is estimated that there is currently PST embedded in the cost of new homes equivalent
to a 2% tax rate.
Used or resale homes will not be subject to the BC HST just as they are not subject to GST.

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Current New home Price
before
\$350,000 &450,000 &600,000 &750,000 &1,000,000
GST & PST (PST System)

system PST System HST System PST System HST System PST System HST System PST System HST System PST System HST
System
New home price before &350,000 &343,000
1 \$450,000 \$441,000 \$600,000 \$588,000 \$750,000 \$735,000 \$1,000,000 \$980,000
taxes

2
Embedded PST \$7,000 &0 \$9,000 \$0 \$12,000 \$0 \$15,000 \$0 \$20,000 \$0

## Federal new housing &6,300 &6,174

\$0 \$567 \$0 \$0 \$0 \$0 \$0 \$0
rebate

Property transfer tax &5,000 &4,860 \$7,000 \$6,820 \$10,000 \$9,760 \$13,000 \$12,700 \$18,000 \$17,600

&366,200 &365,696 \$479,500 \$478,123 \$640,000 \$642,070 \$800,500 \$809,650 \$1,068,000 \$1,088,950
Total new home cost
1
including taxes
-01% -0.3% -0.3% 1.1% 2.0%

1
Assumes that pre-tax new home price under the HST decreases by the amount of embedded PST, and that after-tax new home price increases by full amount

109
of provincial HST. Market forces will impact the extent to which these occur.
2
It is estimated that the embedded PST in new homes in BC is, on average, equal to about 2% of the price. The amount of PST embedded in a specific

## GOODS subject to BC Harmonized Sales Tax

Energy conservation equipment (e.g., insulation, solar power equipment), bicycles, schools
supplies (although books will be exempt), smoke detectors and fire extinguishers, work
related safety equipment basic cable TV and residential phones, non-prescription
medication, vitamins and dietary supplements, residential flues (electricity, natural gas)
and heating, all food products (only basic groceries will remain exempt from BC HST),
safety helmets, life jackets, first aid kits, magazines and newspapers.

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Partial British Columbia Harmonized Sales Tax Rebate on New B.C. and Vancouver Housing and Real Estate

## Price of Eligible Purchase Price

GST Portion – BC Portion –
New Home (not including
New Housing New Housing Total Rebates New Home Cost Increase
(not including property transfer tax
Rebate1 Rebate2
GST/HST) & other closing fees)
\$350,000 \$6,300 \$17,500 \$23,800 \$368,200 \$0
\$400,000 \$3,150 \$20,000 \$23,150 \$424,850 \$0
\$600,000 \$0 \$20,000 \$20,000 \$652,000 \$22,000
\$800,000 \$0 \$20,000 \$20,000 \$876,000 \$36,000
\$1,000,000 \$0 \$20,000 \$20,000 \$1,100,000 \$50,000
1
New British Columbia and Vancouver home buyers may be eligible for the federal GST Rebate
(Called the GST new housing rebate), which generally equals 36% of the total GST tax paid on the first \$350,000
of the purchase price of a new home. The amount of the federal GST rebate is phased out on a straight-line basis
for new BC and Vancouver homes priced between \$350,000 and less than \$450,000.
2
British Columbia proposed Harmonized Sales Tax rebate (or BC HST rebate) for new housing is equal to 5% of
the purchase price up to a maximum rebate of \$20,000.

Wondering What Goods and Services are Subject to the New BC HST?
As with any transition between taxes, there is much confusion among the public and
consumers as to the new laws and guidelines. Such is the case with the implementation of
the B.C. Harmonized Sales Tax or BC HST of 12%, what goods and services are subject to
this new tax? And what products that were charged provincial sales tax or PST of 7% will
be charged at 12% HST now? Basically speaking, the B.C. Harmonized Sales Tax is the
harmonization or combination of the 2 taxes that British Columbians pay currently.
However, some goods and services are subject only to PST and some only to GST while
others are subject to both taxes. For the new BC HST, everything will be taxed at 12%.
Here is a list of BC goods and services that used to be only charged 7% PST, and will now
be subject to the entire harmonized sales tax of twelve per cent.

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SERVICES subject to the new B.C. HST
Airline fares within Canada, Funeral services, Real estate fees, Membership fees for health
clubs, dry cleaning, personal services such as hair care, Movie and theatre tickets,
Professional services such as accounting and home care, Repair services for household
appliances, and Household maintenance such as renovations and painting.

## GOODS and SERVICES that will actually cost LESS!

Liquor at restaurants will actually end up costing less with the integration of the 12% HST
in British Columbia. Currently, there is a 15% tax on liquor in BC restaurants (that’s 5%
GST and 10% liquor tax). This 15% liquor tax will be replaced with the 12% harmonized
sales tax, reducing the taxes by 3%.

GOODS and SERVICES that is exempt from the B.C. Harmonized Sales Tax of 12%
These include fuel including gas, diesel and bio-fuel in addition to low income families who
will receive HST refund cheques quarterly to compensate for the 12% HST. The HST refund
cheques to low income families is in addition to the federal GST refund cheques as well as
the BC carbon tax credit cheques that they currently receive. Also, children’s items
including books, clothing, footwear, car seats, booster seats, diapers and feminine hygiene
products are exempt from the 12% BC HST tax.

## Benefits for Small and Medium-Sized Businesses

The proposed Harmonized Sales Tax (HST) will reduce costs for B.C.’s small and medium sized businesses by
eliminating the PST on business costs, generating about \$2 billion dollars in savings from all businesses that can be
passed on to consumers.

112
Currently, businesses pay PST on most of their “inputs” that go into producing or selling their products and
services. For example, tax is paid on office equipment, supplies and furniture, telecommunications equipment and
services,
Vehicles and energy to heat and light their buildings and power their equipment
Under the proposed HST, all B.C. businesses will no longer pay tax on these input costs resulting in savings of
\$1.9 billion
For example, a restaurant wills no longer pay sales tax (PST) on products which are considered business “inputs”
Under HST such as:

##  fridges, stoves, freezers, dishwashers and other appliances

 energy for heat, cooking and operating equipment and lighting
 cleaning supplies, such as rags, soaps and cleaning solutions,
 cash registers, computer hardware and software
 equipment repair and maintenance services
 paper towel and toilet paper
 customer food bills and menus
 cloth napkins, table cloths, tray covers and placemats
 pots, pans, kitchen implements and knives
 plates, bowls, glasses, cups, other reusable dishes, and cutlery
 coffee machines, blenders, mixers and other small appliances
 free-standing equipment such as juice dispensers, ice machines and coolers
 office equipment, supplies and furniture
 advertising materials, such as flyers and brochures
 items purchased to give away as free promotions
 These savings will reduce business costs, attract investment, create jobs and according to studies on the
implementation of HST in eastern Canada, result in lower prices for consumers.

## Some items addressed in the proposed HST transitional rules:

113
 Funeral services - HST will not apply to funeral services where the contract is entered into before July 1, 2010.

 Transitional PST inventory rebate for residential real property contracts - A rebate will be available for PST
embedded in construction materials purchased before July 1, 2010, but used in residential property contracts on or
after July 1, 2010.

 Subscriptions to newspapers, magazines and other periodical publications - HST will not apply to subscriptions
paid before July 1, 2010.

 Passenger transportation services - HST will generally not apply to the cost of continuous journeys that commence
before July 1, 2010.

 Freight transportation services - HST will generally not apply to the cost of a freight transportation service
performed on or after July 1, 2010 if the service is part of a continuous freight movement of goods that begins
before July 2010.

114
What's Taxable under the HST and What's Not? 1

## AROUND THE HOUSE GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
Cleaning Products 5% 7% No (remains 12%)
Laundry Detergent, Fabric Softeners 5% 7% No (remains 12%)
Household Furniture 5% 7% No (remains 12%)
Household Appliances (Refrigerators, Stoves, Washers, 5% 7% No (remains 12%)
Dryers,
Pre-packaged Computer Software 5% 7% ۲ 1F No (remains 12%)
Books (Including Audio Books) 5% No PST No (remains 5%)
Newspapers 5% No PST Yes (changes to 12%)
Certain School Supplies 5% No PST Yes (changes to 12%)
Magazines 5% No PST Yes (changes to 12%)
Office Supplies and Stationery 5% 7% No (remains 12%)
Landscaping Material (Sod, Topsoil, Rockery) 5% 7% No (remains 12%)
Linens (e.g., Blankets, Towels, Sheets) 5% 7% No (remains 12%)
Tens, Sleeping Bags, Camping Equipment 5% 7% No (remains 12%)
Tools 5% 7% No (remains 12%)
Patio Furniture 5% 7% No (remains 12%)
Rugs and Mats 5% 7% No (remains 12%)
Works of Art, Vases, and Carvings 5% 7% No (remains 12%)
Sewing Machines 5% 7% No (remains 12%)
Vacuum Cleaners 5% 7% No (remains 12%)
Barbeques, Lawnmowers, Snow Blowers, Sprinklers 5% 7% No (remains 12%)
Toys (e.g., Puzzles, Games, Action Figures, Dolls, 5% 7% No (remains 12%)
Playsets)
Outdoor Play Equipment (e.g., Swing Sets, Sandboxes, 5% 7% No (remains 12%)
Slides)
Arts and Craft Supplies (e.g., Glue, Paper, etc) 5% 7% Yes (changes to
Building Materials (e.g., Lumber, Concrete Mix, Nails) 5% 7% Yes (changes to 12%)

1
- Assumes sales by GST/HST registrants that are not non-profit organization or registered charities, unless otherwise specified.
2
- The Energy Star exemption for residential refrigerators, freezers and clothes washers ended on March 31, 2010. All major household appliances are now subject to PST.

115
Energy Star Windows 5% No PST 3 Yes (changes to 12%)
Thermal Insulation, Weather Stripping and Caulking 5% NoPST No (remains 12%)
Exterior and Interior Paint 5% 7% No (remains 12%)
Kitchen Utensils 5% 7% No (remains 12%)
Cookware 5% 7% No (remains 12%)
First Aid Kits 5% NoPST No (remains 12%)
Smoke Detectors Valued less Than \$2502 for Residential 5% No PST No (remains 12%)
Use
Other Smoke Detectors 5% 7% No (remains 12%)
Household Pets (Including Pet Food) 5% 7% No (remains 12%)
House Plants, Cut Flowers, and Outdoor Ornamental 5% 7% No (remains 12%)
Plants
Food Producing Plants and Trees (e.g., Tomato Plants, 5% NoPST No (remains 12%)
Plum Tree)
Household Moving Services 5% NoPST No (remains 12%)

## CLOTHING, FOOTWEAR AND ACCESSORIES GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
Adult Clothing and Footwear 5% 7% No (remains 12%)

## Adult Sized Clothing for Children 5% No PST Yes (changes to 12%)

4
Children's Cloth Diapers 5% No PST No (remains 5%)
5
Children's Disposable Diapers 5% 7% Yes (drops to 5%)

## Formal Wear Rentals 5% 7% No (remains 12%)

3
- Exemption was scheduled to expire April 2011.
4
- For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf.
5
- For Further detail see http://www.cra-arc.gc.ca/E/pub/gi/gi-063-e.pdf.

116
6
Used Adult Clothing Purchased for Less Than \$100 5% No PST Yes (changes to 12%)

## FOOD AND BEVERAGES GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
Basic Groceries (e.g., Dairy, Meat, Vegetables, Canned Goods) No GST No PST No HST

## Restaurant Meals 5% No PST Yes (changes to 12%)

7
Alcoholic Beverages 5% 10% Yes (drops to 12%)
8 9
Catering and Event Planning Services 5% No PST Yes (changes to 12%)

## (e.g., planning, consulting, coordinating and organizing)

6
- All sales used or donated goods mode by a registered charity are exempt from HST.
7
- Although the provincial sales tax rate on liquor is decreasing from 10% to 7% liquor mark-ups are adjusted with the implementation of the HST to generally keep the Liquor Distribution Branch shelf
prices constant..
8
- PST applies if the caterer provides a taxable service (e.g., setting up and taking down temporary gazebos, tents, and dance floors) or taxable goods that the customer keeps (e.g., flowers or
decorations).
9
- Catering provided by a registered charity is exempt from HST.

117
HOME SERVESES GST-taxable PST-taxable before Is there a change to the
before July 1,2010 amount of tax payable the
July, 2010 HST?
Basic Cable Television 5% No PST Yes (changes to 12%)
Additional or Specialty Cable Television or Satellite Television 5% 7% No (remains 12%)
Cell Phone 5% 7% No (remains 12%)
Municipal Water No GST No PST No HST
Home Maintenance Equipment (e.g., Lawn Mowers, Mops) 5% 7% No (remains 12%)
Local Residential Phone 5% No PST Yes (changes to 12%)
Long Distance Telephone Services 5% 7% No (remains 12%)
Repair to Certain Household Appliances (e.g., Stoves, Ovens, 5% No PST Yes (changes to 12%)
Refrigerators, Washers, and Dryers)
Repair to Household Electronics (e.g., Televisions and Stereo 5% 7% No (remains 12%)
Equipment)
Home Insurance No GST No PST No HST
Residential Electricity and Heating (e.g., Natural Gas/Oil) 5% No PST, but subject to Yes (drops to 5%, from 5.4%,
10 11
0.4% ICE 9F Fund levy after a 7% provincial rebate) 10F

## Internet Access 5% 7% No (remains 12%)

Repair Maintenance or Renovation Services for Real Property (e.g., 5% No PST Yes (changes to 12%)
Plumbing Electrical Wiring)

Landscaping Lawn-Care, Private Snow Removal and House 5% No PST Yes (changes to 12%)
Cleaning
Computer Hardware Repair Services (e.g., adding or repairing circuit 5% 7% No (remains 12%)
boards or other components
Computer Software Repair Services (e.g., virus removal or software 5% No PST Yes (changes to 12%)
installation)

10
- Innovative Clean Energy
11
- Provincial administered Residential Energy Rebate applies to provincial portion of HST and ICE Fund levy is eliminated.

118
ACCOMMODATION AND TRAVEL GST-taxable PST-taxable Is there a change to the
before before amount of tax payable the
July, 2010 July 1,2010 HST?
Luggage 5% 7% No (remains 12%)

## Municipal Public Transit No GST No PST No HST

12
Hotel Rooms 5% 8% Yes (drops to 12%) 1F

## Taxis 5% No PST Yes (changes to 12%)

Camping Sites 5% No PST Yes (changes to 12%)

## British Columbia Ferry System No GST No PST No HST

Domestic Air, Rail and Bus Travel Originating in British Columbia 5% No PST Yes (changes to 12%)

International Air Travel to Continental United States originating in 5% No PST No (remains 5%)
British Columbia (Other Than Day Trips)
Internationa Air Travel Other Than to Continental United States No GST No PST No HST
originating British Columbia
International Rail, Bus or Ship Travel originating in British No GST No PST No HST
Columbia (Other Than Day Trips)

12
- In certain municipalities there is an additional local hotel room tax of up to 2% for tourism marketing

119
MOTORIZED VEHICLES GST-taxable PST-taxable Is there a change to the
before before amount of tax payable the
July, 2010 July 1,2010 HST?
Short Term Auto Rentals 5% 7% Plus \$ 1.50 per Yes (rate remains at 12% but
day Passenger \$1.50 per day tax eliminated
Vehicle Rental Tax
Lease of a Vehicle Other Than an Alternative Fuel Vehicle of Fuel 5% 7% to 10% Depends on previous PST
Efficient Vehicle treatment (remains 12% or drops
to 12%)
Lease of Alternative Fuel Vehicle and Fuel Efficien Vehicle 5% 7% to 10% (Subject Depends on previous PST
13
to a PST reduction) treatment (remains 12% or drops
to 12%)
Purchase of Vehicle Other Than an Alternative Fuel Vehicle or 5% 7% to 10% Depends on previous P5T
Fuel Efficient Vehicle treatment (remains 12% or drops
to 12%)
Purchase of an Alternative Fuel Vehicle and Fuel Efficient Vehicle 5% 7% to 10% Depends on previous PST
(subject to a treatment (remains 12% of
PST reduction) drops to 12%)
14
Child Car Seats and Booster. Seats 5% No PST No (remains 5%)
Auto Insurance No GST No PST No HST
Vehicle Parts 5% 7% No (remains 12%)

## Purchase of Used Vehicle from a Non- 5% 7% to 10% Depends on previous PST

GST Registrant (e.g., car dealer) treatment (remains 12% or drops
to 12%)
Purchase of Used vehicle from-ali^ff-GST Registrant (e.g., Private No GST 7% to 10% No HST (12% provincial tax
15
seller) applies)

13
- Please note that purchases and leases of some new alternative fuel vehicles or new fuel efficient vehicles are subject to a partial reduction in the PST payable. For more information on the amounts of
this PST reduction and who qualifies, please see Bulletin SST085 Alternative Fuel Vehicles and Fuel Efficient Vehicles, located on the Ministry of Finance's website at http://www.cra-
arc.gc.ca/E/pub/gi/gi-063/gi-063-e.pdf.
14
- For further detail, refer to http://www.cra-arc.gc.ca/E/pub/gi/gi/063-e.pdf.

120
Purchase of Boats and Non-Turbin Aricraft from a Non-GST No GST 7% No HST (12% provincial tax
Registrant (e.g., Private Seller) applies)
Boats and Non-Turbine Aircraft 5% 7% No (remains 12%)
16
Gasoline/Diesel 5% No PST No (remains 5%)

## HOME PURCHASES GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
17
Niew Homes up to \$525,000 5% No PST No change"
18
New Homes over \$525,000 5% No PST Yes
Previously Occupied Homes No GST No PST No HST
Legal fees 5% 7% No (remains 12%)
Real Estate Commissions 5% No PST Yes (changes to 12%)

15
- HST does not apply. However, British Columbia's 12% tax on private sales of boots, aircraft and vehicles will apply to provide comparable treatment to sales by dealerships.
16
- In For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf.
17
- BC will provide a rebate of 71.43% of the provincial portion of the HST, to a maximum of \$26,250, for new housing purchased as a primary residence. The rebate ensures that, on average,
purchasers will pay no more provincial tax due to harmonization-that is, the will pay no more in provincial HST than is currently embedded as PST in the price of a new home. It is estimated that
the embedded PST in new homes in BC is, on overage, equal to about 2% of the price.
18
- Purchasers of eligible new homes over \$, are eligible for a rebate of \$26,250

121
HEALTH AND BEAUTY GST-taxable PST-taxable Is there a change to the
before before amount of tax payable the
July, 2010 July 1,2010 HST?
Health Care Services Offered by a Medical Practitioner (e.g., No GST No PST No HST
19
Medical and Dental Services)
Audiologist Services Offered by a practitioner of the Service No GST No P5T No HST
Chiropractic Services Offered by a practitioner of the Service No GST No PST No HST
Physiotherapy Services Offered by a practitioner of the Service No GST No PST No HST
Massage Therapy Services 5% No PST Yes (changes to 12%)
Pharmacist Dispensing Fees No GST No PST No HST
Over-the-Counter Medications 5% No PST Yes (changes to 12%)
Prescription Drugs No GST No PST No HST
Some Medical Devices Including Walkers, Hearing Aids No GST No PST No HST
Prescription Glasses and Contact Lenses No GST No PST No HST
20
Feminine Hygiene Products 5% No PST No (remains 5%)
Adult Incontinence Products No GST No PST No HST
Cosmetics 5% 7% No (remain5l2%)
Hair Care Products (e.g., Shampoo, Conditioner, Styling Products) 5% 7% No (remains 12%)
Dental Hygiene Products (e.g.. Toothpaste, Toothbrushes, Floss) 5% 7% No (remains 12%)
Vitamins 5% No PST Yes (changes to 12%)
Pill Boxes 5% 7% No (remains 12%)
Sow Dryers 5% 7% No (remains 12%)
Curling Irons 5% 79/o No (remains 12%)
Deodorants and Deodorrizers 5% 7% No (remains 12%)
Nail Care Products (e.g. Nail Polish, Nail Files) 5% 7% No (remains 12%)
Perfume 5% 7% No (remains 12%)
Shaving Supplies (e.g., Razors, Shaving Cream) 5% 7% No (remains 12%)
Tanning Lotion 5% 7% No (remains 12%)

19
- Other than for cosmetic purposes.
20
- For further detail, refer to http://www.cra-arc.gc.ca/E/Pub/gi/gi/061-e.pdf.

122
MEMBERSHIPS, ENTERTAINMENT AND SPORTS GST-taxable PST-taxable Is there a change to the
EQUIPMENT before before amount of tax payable the
July, 2010 July 1,2010 HST?
Admission to Professional Sporting Events (e.g. Hockey, Football 5% No PST Yes (changes to 12%)
and Soccer Games)

## Steles (e.g., Hockey, Figure, Inline) 5% 7% No (remains 12%)

Safety Helmets for Sports (e.g., Hockey Helmets, Snowboard 5% No PST Yes (changes to 12%)
Helmets, Bike Helmets)

## Gym and Athletic Memberships 5% No PST Yes (changes to 12%)

21
Ballet, Karate, Trampoline. Hockey. Soccer Lessons etc. 5% No PST Yes (changes to 12%)
22
Tickets for Live Theatre 5% No PST Yes (changes to 12%)

## Music Concerts 5% No PST Yes (changes to 12%)

21
- These items are subject to HST, although some could be exempt from HST if provided by a public service boody to children 14 and under and underprivileged individuals with a disability.
22
- Subject to HST, although some could be exempt if the maximum admission charged by a public service body to children 14 and under and underprivileged individuals with a disability.

123
Sports Equipment (e.g., Footballs, Soccer Ball, Baseball Bats, Free 5% 7% No (remains 12%)
Standing Gymnastics Equipment)

## Adult Sized Ski Gloves 5% 7% No (remains 12%)

Adult Sized Ski Gloves for Children 5% No PST Yes (changes to 12%)

## Adult Sized Ski Boots 5% 7% No (remains 12%)

Adult Sized Ski Boots for Children 5% No PST Yes (changes to 12%)

## LEASSE AND RENTALS GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
23
Condo Fees No GST No PST NO HST

## ELECTRONICS GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
Televisions 5% 7% No (remains 12%)

## Digital Cameras and Camcorders 5% 7% No (remains 12%)

23
- Residential condo association fees to residents are exempt; however, purchase by condominium corporation will be subject to HST, if applicable.

124
Cell Phones and Smart Phones 5% 7% No (remains 12%)

## Headphones 5% 7% No (remains 12%)

Marine Electronics (e.g., Marine Radios, GPS Systems, Speakers) 5% 7% No (remains 12%)

125
PROFESSIONAL AND PERSONAL SERVICES GST-taxable PST-taxable Is there a change to the
before before amount of tax payable the
July, 2010 July 1,2010 HST?
Child Care Services No GST No PST No HST

## Hair Stylist/Barber 5% No PST Yes (changes to 12%)

Esthetician Services (e.g., Manicures, Pedicures, Facials) 5% No PST Yes (changes to 12%)

## TOBACCO GST-taxable PST-taxable Is there a change to the

before before amount of tax payable the
July, 2010 July 1,2010 HST?
Cigarettes 5% No PST Yes (changes to 12%)

## Nicotine Replacement Products 5% No PST Yes (changes to 12%)

126
BANKING AND INVESTMENTS GST-taxable PST-taxable Is there a change to the
before before amount of tax payable the
July, 2010 July 1,2010 HST?
Mortgage Interest Costs No GST No PST No HST

## Most Financial Services No GST No PST No HST

127
References

1. BC budget 2010
http://www.bcbudget.gov.bc.ca/2010/highlights/2010_Highlights.pdf

## 2. BC Budget 2009 http://www.bcbudget.gov.bc.ca/2009/estimates/2009_Estimates.pdf

3. http://www.fin.gov.bc.ca/Fed_Prov_MOU_english_July23.pdf
4. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par Maximilian Baylor et Louis Beauséjour,
5. Vaughn Palmer Ambitious reforms by Liberal governments to be eclipsed by HST, Vancouver Sun, July 28th, 2009
6. from [[2][Public account of Canada]], stating at \$29.9 billions the 5% GST revenue for whole Canada for the exercise
2007/2008, and considering the contributively part of the British Columbia is of 15.4% in 2003 according to
http://www.parl.gc.ca/information/library/PRBpubs/prb0610-e.htm, , 29.9*(15.7%)= \$4.6Billions not including the BC GDP
growth
7. http://www2.news.gov.bc.ca/news_releases_2009-2013/2009PREM0017-000141.htm
8. Taxation and Economic Efficiency: Results from a Canadian CGE Model, par Maximilian Baylor et Louis Beauséjour,
9. http://www.fraserinstitute.org/Commerce.Web/product_files/JulAug06ffTaxCuts.pdf