$20,000 Rebate - Not Enough
$20,000 rebate barely softens soaring levies
Come July of next year, John and Mary Homebuyer could be feeling hosed rather than harmonized by the province's new tax.
In Vancouver, where the average new home sold for $896,792 this year, those lucky enough to afford one paid out $60,775 in taxes.
That included $44,480 in GST and $15,936 in Property Transfer Tax.
Under the harmonized sales tax that kicks in on July 1, 2010, John and Mary's tax bill will rise to a whopping $107,615 --more than $45,000 in extra taxes.
To soften the blow, the Liberal government will offer the homebuyers $20,000 in a flat rebate.
And if the builder is kind, he'll pass on the $17,936 in provincial sales tax that he's been hiding in the cost of the home, because he can claim all his materials and labour costs in rebates come next July. That cuts the HST tax bill to $85,615.
This means that John and Mary Housebuyer may have a home, but they'll be skimping on fancy suppers.
Total hike in their tax bill on a new Vancouver home purchased for $896,792 once the HST hits? $24,840 in new taxes.