Government announces the 2012 budget today, more good news

Fiscal Discipline for a Stale Economy 

BURNABY, BC (February 21, 2012) - The Minister of Finance, Honourable Kevin Falcon announced the 2012 budget today with more positive news for the residential construction industry. Last week the Minister released the new harmonized sales tax (HST) transition rules, which will take effect April 1, 2012. Announced today:

$10,000 First Time New Home Buyer Bonus 

BC First Time Home Buyers are eligible for an income tax credit bonus effective February 1, 2012 to March 31, 2013 calculated at 5% of purchase price, up to a maximum of $10,000.

BC Seniors Home Renovation Tax Credit

Up to $1,000 a year for those over 65 years old to assist with increased independence and flexibility to remain in their homes longer.  

Release of Surplus Corporate Assets

Surplus properties and assets, will be released for sale including parcels of land previously acquired for development of transport corridors and parcels of crown land, providing potential building sites.

"Renovations in BC are a $7 billion business, we had hoped that the finance department would adopt our suggestions on a renovation tax rebate on all renovations to help mitigate the negative impact of the HST," said Doug Wittal, President of the Canadian Home Builders' Association of BC. "but measures announced today, combined with Friday's announcement on the HST transition rules will certainly stimulate small renovations for seniors, and assist first time home buyers facing the challenge of getting into the housing market."

Threshold being raised to $850,000

Government announces the transition rules for the HST early

BURNABY, BC (February 17, 2012) - The Honourable Kevin Falcon, Minister of Finance held a press conference today in Victoria to announce transition rules for the harmonized sales tax and the affect it will have on the home building industry. Effective April 1, 2012 the threshold for new housing rebates will be increased from $525,000 to $850,000, including secondary homes.

"We are elated the Provincial Ministry of Finance and the Federal Finance Department asked for our input and that our provincial government listened to the lobbying efforts of CHBA BC," said CEO, M.J. Whitemarsh. "We had the confidence the Government would take our concerns to heart and implement the best solution for our industry, the news today was worth the wait and is even better than we could have anticipated."  

Since the referendum results to rescind the tax, the Canadian Home Builders' Association of BC (CHBA BC) has worked diligently providing information from members to the government requesting the implementation of the transition rules be done as simply and quickly as possible to prevent any further stalling of the residential housing industry.  

"The out-of-box forward thinking from the Government has created a stable situation for all CHBA BC members who build secondary homes," Whitemarsh said. "Houses purchased as of April 1st will ultimately be receiving a $42,500 discount, now that the threshold has been raised."

Releasing the transition rules on housing early was a wise and bold move on government's part, one that is mutually beneficial. CHBA BC lobbied for a tax rebate to be created for consumers on new home purchases and renovations, so the industry could move forward and gain momentum once again.

"Raising the threshold is a brilliant decision that is fair and equitable, a huge benefit to all consumers that will spur the market," said Doug Wittal, President of CHBA BC. "Including the second home market outside the GVRD and CRD will create a huge boom, creating jobs and pushing the industry forward in very innovative ways."  

New Changes to the Building Code

January 13, 2012

Delay in B.C. Building Code creates opportunity for builders

Code updates for wall, attic & basement construction could be significant

An anticipated increase in energy standards in B.C.'s Building Code is now expected to be introduced only after the next update to the National Building Code, bringing the two codes in line with each other.

What does that mean to builders in B.C.? Those who are already going above Code to include enhanced energy efficiency will continue to enjoy a marketing advantage, as energy-aware buyers seek the long-term savings and performance value of efficient homes (and improved resale value).

Meanwhile, those who have not yet adopted energy efficiency standards above Code now have more time to learn and prepare for Code changes, which may include significant changes in wall, attic, and basement construction.

Why is the Code update delayed?

"Energy standards were first introduced in the 2008 Code update, with options for following a prescriptive path, or a performance option," says Doug Overholt, representative for BC Hydro's Power Smart New Home program. "Now, we understand the province is awaiting the model energy content that will be in the National Building Code before increasing the B.C. standards."

The federal government is updating energy-related provisions in the National Building Code to bring them in line with the objective-based format used in other national model construction codes, meaning that energy-efficiency will now be a stated objective within the Code. A special public review will run from January 9 to March 2 to allow input on the Code revisions.

In B.C., national model codes are often adopted verbatim, but the energy provisions are expected to undergo extra scrutiny since B.C. has already advanced energy efficiency in the provincial Building Code. No date is set for the next update to the B.C. Code's energy provisions.

How Power Smart helps with energy efficiency

"We work with builders to help them find the best options for improving their product," says Kari Reid, program manager for Power Smart New Homes. "We provide financial incentives, marketing support, and advice so they can offer energy efficient homes and help lead the market.

"When the new Code does come, those who have already changed their practices will be ready. Meanwhile, they're able to leverage the marketing value of demonstrating that they're leading-edge builders. We're keen to see the code change so that energy efficiency becomes the baseline for all building — but we can already see the market shifting."

The Transition From HST to PST

Fellow CHBA BC Members:

At a meeting earlier today Premier Clark acknowledged the negative impact transition from HST to PST will have on our industry. The anticipated time to complete the transition is 18 months, a time during which consumers will defer purchasing new homes and making renovation decisions to save tax. Premier Clark acknowledged that at a time when government is creating progressive opportunities for growth and increasing the demand for more jobs, it makes no sense to hamper our industry, one that is a huge contributor to our provinces' economy.

Premier Clark shared that government is working on a plan to mitigate the impact transition could have on new homes and renovations. We will meet again in early September.   

We will be working diligently to get answers quickly and will keep everyone informed as we learn more.  

Vicki Gerrits

President, CHBA BC 

How HST Affects You

HST for Buyers of Single Family Homes: How Will HST Affect Me?

Understanding the HST

• Starting July 1, 2010 HST will apply to new residential housing; however, the BC government has implemented changes to minimize the impact to home buyers.

• Before HST, PST had been paid on all materials used in the construction of a home.

• This PST was embedded in the cost of a new home. It is estimated that this embedded PST added 2% to the cost of a new home.

• All home buyers who purchase a new home (primary residence) after October 20, 2009 that they take ownership and move into after June 30, 2010 will receive a rebate for HST.

• This rebate can be assigned to the builder, so home buyers only need to pay the ‘net’ home price (the home price plus the HST, less the rebate).

• The rebate is 71.43% of the provincial part of the HST paid (7%).

• For owner built (custom) houses, the maximum rebate will vary depending on whether HST applies to the land. If the owner already owns the land and HST did not apply, the maximum rebate is $17,588. If HST was paid on the land, then the maximum rebate is $26,250.

• With HST, you can also claim a PST Transitional Tax Adjustment (TTA) rebate to help offset the PST embedded into the construction of the home. This rebate is based upon what percentage of the home was completed before July 1, 2010.

HST Net Effect

New Home Price	2% Embedded PST	After Harmonization
$400,000	$8,000	HST (7% BC portion)	$28,000
		BC new housing rebate	(20,000)
		Previous 2% embedded PST	(8,000)
		Net impact on home buyer	$0
$525,000	$10,500	HST (7% BC portion)	$36,750
		BC new housing rebate	(26,250)
		Previous 2% embedded PST	(10,500)
		Net impact on home buyer	$0
$700,000	$14,000	HST (7% BC portion)	$49,000
		BC new housing rebate	(26,250)
		Previous 2% embedded PST	(14,000)
		Net impact on home buyer	$8,750