Which federal tax applies to the purchase of a newly constructed home in British Columbia?
Correct Answer
A) GST at 5%
New homes in BC are subject to 5% GST. Provincial Sales Tax (PST) does not apply to real estate transactions. BC left the HST program in 2013 and reverted to GST + PST.
Why This Is the Correct Answer
Option A is correct because newly constructed homes in BC are subject to GST at 5%, which is a federal tax. BC reverted from the HST to the GST+PST system on April 1, 2013. Under the current system, the 5% GST applies to new homes, substantially renovated homes, and commercial-to-residential conversions. PST does not apply to real estate transactions.
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