BC Province HST Real Estate: HST investment Property Tax Real Estate Tax
by admin
leave a comment
Myths about HST and Vancouver Real Estate Market
For Sale
Ignorance about HST is causing a chaos on Vancouver real estate market. Every prospective home buyer, real estate agent, mortgage broker have their very own interpretation of HST on real estate transaction.
It’s a myth that housing market is down due to HST. HST could be a great opportunity for everyone involved in the housing market to bring in more sales. HST should not be blamed for a downtrend in housing market.
With the implementation of HST in BC, a new housing rebate program was introduced, to offset the additional HST burden on home purchase. Its an exciting program and it should attract more home buyers in the market.
A prospective new home buyer can purchase a brand new home with no HST, by using BC new housing rebate program. Most of the first time home buyers trying to get their first primary residence are qualified for this program. Beside that, homes for resale are not subject to any HST.
As per the BC new housing rebate program, after implementation of HST, if someone buy a new house valued at $525,000, using the program they do not have to pay any HST. The housing rebate of $26,250 caps off at $525,000. If the property cost more than $525,000, the buyer will pay HST on the additional amount above $525,000.
Also, one very important thing to remember or mention to the prospective home buyer that even Real Estate HST rate is 12%, BC portion of HST rebate of 7%, brings down the effective rate of HST to 5%.
Since HST is a tax on consumption, the higher the property value will be, the more your HST the buyer will pay.
For a property costing $525,000 there is no difference in cost for before HST purchase or after HST purchase.
But for a property costing $1 million after HST purchase puts an additional burden of $20,000, than it would have cost before HST, or 2% of additional tax due to HST.
So, for majority of BC new home buyers, HST does not have any impact at all, with BC new housing rebate program.
For a million dollar home the net impact of HST with BC new housing program is only 2%. And it starts to go up, with the increased purchase price of the housing.
It is well known that Vancouver home prices are inflated and if someone knowingly investing in that market, a 2% additional tax on a million dollar home purchase, should not make a significant difference in their purchasing decision. For high end home buyers its a choice between paying 2% HST now, or wait and pay 5% inflated price for the property few months later on top of more than 2% HST.
How to Face a CRA Audit?
Did you get a letter from Canada Revenue Agency (CRA), requesting supporting documents for your Income Tax Return? It does not say explicitly that you are being audited, but actually, your return has been selected for a random audit to see compliance with Canadian Tax Laws.
CRA usually have all the information regarding your income, in their database. Because by law, in Canada every company is required to send CRA a statement at the end of the year, of taxable payments they made to all employees and/or individuals.
Sometime, your income tax return may raise a audit flag for some information, or you just might be randomly selected for an audit. It should be a matter of concern for taxpayers, if you are selected for an audit. Because you don’t know, why you are being audited. After the audit, they may re assess your tax liability and send you a bill for additional taxes with fines and interest.
If your return is done correctly and you can provide all the supporting documents, usually there is nothing to worry about. Working with CRA auditors, I have personally found them to be friendly, courteous, knowledgeable and sympathetic to taxpayers.
If you want to face the CRA audit on your own, you sure can represent yourself to CRA. In that case, the auditor knows that you are not familiar with audit procedures and policies and probably you did your income tax return with off the shelf tax software. He already has advantage against you and can overwhelm you with complex questions about your tax return and in the end, send you a new tax bill.
It is always a prudent decision to work with an experienced, professional tax advisor when being audited. This decision can mean thousands of dollars savings for you and peace of mind. Consulting with a professional can be expensive, but your return on investment is many times of the money that you will spend for the advice.
A professional tax advisor who has handled audits in the past won’t be intimidated by the CRA auditors. Also, they are familiar with CRA’s audit proceeding and can answer correctly to CRA’s complex audit questions.
We have successfully represented our clients to CRA auditors and the peace of mind our clients experienced is priceless, knowing they are in good hands to deal with CRA
Canada Revenue Agency Income Tax: Canada Income Tax IRS Tax Payer
by admin
leave a comment
Pre Filled Income Tax Form for Canada
Income Tax
How to Save HST and Benefit both Consumers and Businesses
British Columbia HST referendum will take place as specified by the BC Legislation on Saturday, September 24, 2011. Until then, consumers will pay 12% HST and businesses will be able to claim 12% HST input tax credit.
During the remaining 11 months, before the referendum, BC businesses must convince consumers about the benefits of HST to keep it from rescinding it. The benefit of 7% additional input tax credit with HST is beneficial for all businesses.
more »
Workplace Training for Innovation (WTI) FAQ
Since WTI has been in the media there have been a lot of interest about the program.
This is part of Canada govt.’s action plan to stimulate the economy and increasing the skills of currently employed people. It is funded by our Tax money.
The money is a grant; it means you do not have to pay it back, if you follow the grant guideline.
You must use the fund to train your employees (strictly who are on payroll) or you will have to return it to BC Province.
more »