What the HST means for Home Buyers
The British Columbia Real Estate Association and its members are concerned that home buyers and sellers, particularly buyers of new homes, will bear most of the burden associated with the proposed Harmonized Sales Tax (HST).
The cost of real estate transactions will increase on July 1, 2010 with the introduction of the new HST. The people of BC will be particularly affected since our province has some of the highest priced real estate in the country. Approximately 40 per cent of all real estate transactions in BC involve sales priced over $400,000, the threshold over which any HST rebate begins to lose significance.
The effect of the HST will also be to introduce a new tax on most services provided by GST/HST registrants in BC. As such, service-providers like REALTORS®, home inspectors, and appraisers will be required by government to collect and remit 12 per cent HST on their fees.
The bottom line is that the proposed HST will increase the cost of buying and selling all property and it will have a much greater impact on the purchase of newly-built homes. Almost 60 per cent of the average family's household income is required to cover home ownership costs. If the HST is implemented as planned, they'll be paying even more.