PST Transition Rules

April 1, 2013 is the beginning of BC's return to the GST/PST system and the end of the HST. For New home purchasers, it is the beginning of the PST Transition Rules.

Below is a summary of the new rules from the website:


When does HST apply, and when does GST apply?

HST applies if tax becomes payable before April 1, 2013.

GST applies where tax becomes payable after March 31, 2013. In addition, the BC transition tax may then apply where construction or substantial renovation is at least 10% complete on April 1, 2013.

Generally, when does the tax become payable?


Except for the sale of certain residential strata units, the tax is payable on the earlier of the following dates:

  • when the seller transfers ownership (also known as the completion date) of the new home to the buyer, OR
  • when the seller transfers possession of the new home to the buyer under the Contract of Purchase and Sale.

Will the PST apply to real property?

  1. No. HST will generally cease to apply on the purchase of new housing as of April 1, 2013, even if the Contract of Purchase and Sale was signed or new home construction started before April 1, 2013, provided neither possession nor ownership transfer before April 1, 2013. However, the provincial government may collect a temporary transition tax of 2% if certain conditions are met.

Are there any rebates for sellers related to the temporary transition tax?

Yes, the BC government has introduced a transition rebate to recognize that a seller will not be able to claim input tax credits on PST paid on construction materials acquired after March 31, 2013. The rebate is available where both conditions are met:

  • The BC transition tax applies to the sale of new housing, AND
  • Construction or substantial renovation is at least 10%, but not more than 90%, complete, before April 1, 2013.

The transition tax rebate for new housing will be calculated on the degree of completion of the housing as of April 1, 2013:

Degree of construction complete as of April 1, 2013
Transition tax rebate as a percentage of consideration or fair market value
Less than 10 per cent
Not applicable
10 per cent ≤ and < 25 per cent
1.5 per cent
25 per cent ≤ and < 50 per cent
1.0 per cent
50 per cent ≤ and < 75 per cent
0.5 per cent
75 per cent ≤ and < 90 per cent
0.2 per cent
90 per cent or greater
0.0 per cent

How will the transition affect the way I prepare or counter a standard form Contract of Purchase and Sale?

The BC government has introduced disclosure requirements for builders (i.e., sellers) during the transition period to clarify the taxes and rebates that are included in the sale price stated in the Contract of Purchase and Sale.

Agreements entered into from December 1, 2012 to March 31, 2015 must contain the following prescribed information:

  • the value of consideration (i.e., purchase price), disclosure of whether tax is inclusive or exclusive of the price, and a breakdown identifying the amount and rate of each tax and/or rebate where applicable;
  • a statement that discloses whether or not the seller is a foreign supplier (essentially, a “foreign supplier” is not resident of Canada); and
  • if the seller is not a foreign supplier, then the following Notice to Purchaser “If (a) both ownership and possession of newly constructed  or substantially renovated housing transfer on or after April 1, 2013 and (b) either ownership orpossession of the housing transfer before April 1, 2015, then
    • the 7% provincial component of the HST and the BC HST new housing rebate for primary places of residences will not apply,
    • the 2% BC transition tax may be payable by the buyer, and
    • the supplier may be eligible for a BC transition rebate in respect of the housing.

Taken from