What the HST means for you
The provincial government's decision to harmonize the provincial and federal sales taxes into the new 12% HST will remove $2 billion in costs to BC businesses and provide point-of-sale rebates on many important goods and services.
However, we are concerned that the proposed HST will increase the cost of buying and selling all property and have a significant impact on the purchase of newly-built homes.
Increasing Cost of Professional Services like REALTOR® Commissions
Under the previous system, only five per cent GST was charged on professional services associated with real estate transactions such as appraisals, inspections and REALTOR® commissions.
Under the proposed HST, the taxes charged on those services will jump an additional seven per cent, adding to nearly all closing costs.
Increasing Cost of New Homes
For new homes, under the previous system, only five per cent GST was charged on new home sales. Under the proposed HST, a very complicated new arrangement will drive up the cost of new homes.
Partial Rebate Not Enough
To offset the increase in costs, the BC Government plans to offer a partial rebate of the HST for new housing, intending that new homes up to $400,000 should bear no more tax than under the current PST system. Homes above $400,000 will receive a flat rebate of $20,000. New home sales over $400,000 will be dramatically impacted, as buyers will have to pay an additional seven per cent tax on amounts over $400,000.
Consider a new home in Greater Vancouver: with a current Housing Price Index benchmark price for all new residential properties combined (single family detached, townhouse, and condo) of $528,821, the current taxes (GST and the Property Transfer Tax) total over $ 35,000. On July 1, 2010, the same home buyer will pay almost $5,000 more in taxes due to the HST.
British Columbians Already Taxed Unfairly on Housing
In addition, the Property Transfer Tax already requires BC homebuyers to shoulder an unfair tax burden. British Columbians pay 222 per cent more in land transfer taxes per transaction than the average Canadian.
The BC Government levies a Property Transfer Tax rate that is 129 per cent higher than the average for Canadian provinces. Higher property prices are not solely to blame for this scenario; prices in British Columbia are 45 per cent higher, so the inequitable structure of the BC Government's Property Transfer Tax adds an additional burden of up to 177 per cent.
The data relating to real estate on this website comes in part from the MLS® Reciprocity program of either the Greater Vancouver REALTORS® (GVR), the Fraser Valley Real Estate Board (FVREB) or the Chilliwack and District Real Estate Board (CADREB). Real estate listings held by participating real estate firms are marked with the MLS® logo and detailed information about the listing includes the name of the listing agent. This representation is based in whole or part on data generated by either the GVR, the FVREB or the CADREB which assumes no responsibility for its accuracy. The materials contained on this page may not be reproduced without the express written consent of either the GVR, the FVREB or the CADREB.
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