From April 2012, vacation homebuyers will pay the same sales tax rate in B.C. as in Alberta, encouraging them to buy in 2012 instead of waiting until the HST is phased out in April 2013.
Under the process announced by B.C. Finance Minister Kevin Falcon on Friday, February 17, new secondary vacation or recreational homes outside the Greater Vancouver and Capital regional districts priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012.
This represents a rebate on the provincial portion of the HST until the province returns to a PST system on April 1, 2013. Sales of new and secondary vacation homes do not incur PST.
The transition policy means buyers will pay the same as if they had purchased the property in Alberta, if they had purchased the property before the HST was introduced July 1, 2010 or if they purchase property after April 1, 2013, under the PST.
Fernie Vacation Properties owner Mike Delich lobbied for the tax change because he believes it will make vacation property in border resort cities in B.C. more attractive to Alberta homebuyers.
He adds this will boost the local economy and get the housing industry and its many subsidiary industries back on track.
Delich, who is behind Timberline Lodges and Snow Creek Lodge and Cabin developments at Fernie Alpine Resort, has spent a year lobbying for the move.
He met premier Christy Clark twice and addressed the Standing Finance Committee in late 2011 to present the detrimental impact that the tax had on the second home housing industry.
Delich hopes this will encourage potential secondary homebuyers to buy this year, rather than wait until B.C. returns to the PST system in April 2013.
He said, “I am very pleased with these changes that will get people in the B.C. housing industry back to work and creating jobs in the communities.
“This will help everyone in the industry, from interior designers to builders, as well as all the businesses and individuals in communities such as Fernie who rely on tourism for their income.
“This announcement gives a clear message that B.C. welcomes visitors and investors and I expect it to have an immediate positive effect on the 2012 construction and home-selling season in all regions of the B.C. Rockies.”