Monday, February 8, 2010
What the HST means for Home Buyers in Kelowna and West Kelowna
Here is an informative article from the British Columbia Real Estate Association,
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% of all real estate transactions in BC involve sales priced over $400,000, the original threshold for an HST rebate.
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
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% 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.
West Kelowna Real Estate Agent