Magazine for professional home renovators.

Reno contractors in B.C. to get boost from HST dismantling

By David Godkin

The CEO of the Greater Vancouver Home Builders Association is hoping for a boost in residential construction now that the provincial government has set April 1 for a return to the provincial sales tax from the HST that was unexpectedly introduced in 2010. In the 16 months since a province-wide referendum overturned implementation of the HST renovators have seen a dip in construction activity which they blame on continued uncertainty around the tax. Bob de Wit says new taxation rules will now be a little clearer prior to and after the return to the PST.

“They have clarified the rules around application of the HST to new sales during the transition period and they’ve also been clear about the application of PST on labour. But they still have not released the full regulations relating to implementation of the PST which obviously we would like to see.”

The good news is that as of April 1 home buyers will no longer pay 7 per cent on new home purchases, while renovation contractors will only charge 5 per cent GST instead of the 12% HST for their services (e.g., carpentry, plumbing, electrical wiring). The same will apply to thermal insulation, weather stripping and caulking products. The only tax change for paint, lumber, concrete mix and nails is what the tax will be called: contractors and their clients will still pay 5% GST and 7% PST on those products, which is equal to the previous 12% HST. Nonetheless, Jeff Bain, President of Vancouver-based JKB Construction, says a return to the original PST from the HST will encourage more home owners to commit to renovations which they had been putting off until now.

“Absolutely. That’s what the whole referendum was about. The HST was a sneaky tax the way it came in and it was a lot more tax you were paying on every dollar you spent. Everything’s going to help.”

What will not help, says Rob Currie, co-owner of Basement Systems Vancouver, is the provincial government’s continued refusal to implement a renovation tax credit.  He believes it’s now up to the federal government to return a portion of the tax paid for renovation services and products to homeowners in every province. “That should be done at all times to give the average hard working person who wants to a bit of renovation the opportunity to get a little money back.”  To its credit, BC’s government does provide seniors with a 10 per cent home renovation tax credit, with no lifetime maximum; But Currie wants everyone to receive renovation tax credits, along with prorated thresholds based on the amount home owners spend.

Meantime, B.C. Contractors have complained about a lack of information about the transition from the HST to the PST. In response, the Province has rolled out a comprehensive information campaign that includes in-person and on-line seminars covering the general principles of the PST, one-on-one consultations with tax specialists, and web-based videos. Information is also available by calling 1-877-388-4440 or by visiting http://www.pstinbc.ca.

 

 

Posted by
Steve Payne is the editor of Canadian Contractor magazine
2 total comments on this postSubmit yours
  1. I do wish Ontario would follow suit. It would help curb the extreme rise of under the table reno’s that more homeowners, prior to the tax are encouraging.
    What I disagree with is Mr. Curries suggestion there be an implementation of a continual reno tax rebate for all homeowners. While we would all love more work, our taxes should be used for more important issues. I know they aren’t, government hands out money right, left, centre for the stupidest things but that’s not an excuse to add to our tax burden. I don’t buy the heart tugging example Mr. Currie mentions, the average hard working soul who should get back money (from me and you) if they do a little renovation. I think we should be all competent enough to find our own work without incentives, just that it needs to be a more level playing field, with the unlicensed contractors less competitive (too much to ask for them being OUT of the picture completely) I’m not the auto industry, my hand isn’t out to the governments pockets, just wish they would keep theirs out of mine so often!

  2. Some of the article is incorrect. As an electrical contractor, I am required to pay both PST and GST (when it comes back). The 7%PST gets passed on to the customer, so saying that it’s going to save them 7% is incorrect . The only savings i can see is on the labour portion, PST still needs to be paid/ collected on the material. So your article is partially correct.

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