HST Transition Rules for New Home Builders and Buyers

In the province's return to the GST/PST system from the HST, government has announced transition support for the home building industry.

For new home buyers, the B.C. new housing rebate threshold will be increased to $850,000. Similarly, purchasers of new secondary vacation or recreational homes outside the Greater Vancouver and Capital Regional Districts have an increased threshold. Homes priced up to $850,000 will now be eligible to claim a provincial grant of up to $42,500 effective April 1, 2012. More specifically:

• B.C.'s portion of the HST will continue to apply before April 1, 2013. Purchasers will be eligible for the new higher B.C. HST new housing rebate of up to $42,500, and builders will continue to claim input tax credits.

• B.C.'s portion of the HST will no longer apply to newly built homes where construction begins on or after April 1, 2013. Builders will once again pay seven per cent PST on their building materials.

• For newly built homes where construction begins before April 1, 2013, but ownership and possession occur after, purchasers will not pay the seven per cent provincial portion of the HST. Instead, purchasers will pay a temporary, transitional provincial tax of two per cent on the full house price. Builders will receive temporary housing transition rebates to offset PST on materials to help prevent double-taxation on homebuyers.

For goods and services that will be subject to PST, PST will generally apply when tax becomes payable on or after April 1, 2013. The province is expected to provide detailed transitional rules for goods and services with full PST legislation this spring.

Encana Selling Major Stake in BC Gas

Encana Corporation is selling a major stake in its BC gas assets, worth approximately $2.9 billion, to Mitubishi Corp. As a result of the sale, Mitsubishi will have a 40% interest in the Cutbank Ridge Partnership.

The Partnership holds approximately 409,000 net acres of Encana's undeveloped Motney-formation natural gas lands in northeastern BC, with proved undeveloped reserves of approximately 900 billion cubic feet of
natural gas equivalent.

Mitsubishi will pay $1.45 billion on closing the deal, expected to occur later this month, and will then invest another $1.45 billion over the next five years.

Encana's sale to Mitubishi was announced the same day the company posted a net loss of almost $250 million for the fourth quarter.

Last week the government released Improving the Care of B.C. Seniors: An Action Plan with the goal of ensuring more accessible, transparent and accountable seniors care in the province.  Key features include: 

• Establishing the Office of the Seniors'
  Advocate, and a pending toll-free phone line for seniors and families.

• Granting online access to facility reports, easier access to assessments of seniors' health needs and information on policies around eligibility, charges and hardship waivers by September 2012.

• Developing a provincial elder abuse prevention, identification and response plan by December 2012.

• Expanding non-medical home support from five communities to up to 65 communities over three years.

This weekly report produced for the BC Chamber of Commerce by Fleishman-Hillard.  While every effort has been made to ensure the accuracy of the information included in this publication as of the date of issue, events and government policies are subject to frequent change.  Therefore, the BC Chamber of Commerce and Fleishman-Hillard cannot assume any responsibility for actions taken solely or principally on the basis on the information contained herein.