75% of MBABC members think the harmonized sales tax (HST) will hurt BC’s real estate industry.
The HST, which is coming to BC and Ontario on July 1, 2010, will raise the cost of home ownership notably.
Not only will the cost of a new home priced at more than $525,000 increase, but all services related to a real estate transaction will also cost 7-8% more–including fees for appraisals, conveyancing and property inspections.
MBABC President, Joe Santos, feels that this may force potential home buyers (especially first-time buyers) to:
- Purchase less expensive homes
- Postpone a purchase due to the higher transaction costs.
These are factors to watch because first-time homebuyers provide considerable support for home prices.
Fact of note: The vast majority of BC and Ontario citizens believe the HST is inequitable. Story / Survey
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MBABC stands for the Mortgage Brokers Association of BC. MBABC represents member brokers in BC and fosters professionalism, ethical standards and consumer awareness.
What a load of garbage. I’m going to postpone my house purchase of 500K because I’m being charged 8% more on a $500 appraisal. Give me a break. Such propaganda.
Yeah, and that 8% on 500k isn’t going to hurt either, eh?
Follow the link. 90% of us think the HST is a tax grab. I guess you’re either part of the 10%, or you don’t live in BC or Ontario.
I guess from the article that the HST applies to new contruction only?
whoever wrote this is a lot of garbage either has way more money than 99% of the population or is just not well informed. The HST will cost almost EVERYTHING you purchase to go up 7 to 8%. From an Accountant’s fee to a haircut to the strata fees you pay monthly to a new house to a meal in a restaurant…the list is endless. Imagine you got an 8% pay cut at work, in fact its worse than that, this is after tax money we need to find to pay more for things.
Maybe people will wake up eventually as we all have to do something to ensure our Government is not allowed to make this new tax law or our economy will suffer quite severely.
@Al – That’s not true, by a long shot. The economic rationale for tax harmonization is pretty air tight.
Andrew Coyne of Maclean’s put it best, so I’ll just quote him:
“The proposition [harmonization opponents] seek to uphold is this: that the two provinces should continue to tax some goods and services, but not others; that the tax should apply, where it does apply, at wildly uneven rates, depending on how many times it has been imposed at various stages in the production chain from raw input to finished good; and last, that we should, through the combined operation of two separate and uncoordinated sales taxes, federal and provincial, each with their own set of exemptions, in effect maintain four different regimes in each province, depending on which of the two taxes applies in any given case: both GST and PST, GST but no PST, PST but no GST, and neither GST nor PST.”
Jack Mintz, one of the foremost tax experts in Canada, projects Ontario’s HST to create increased capital investment of $47 billion, increased annual incomes of 8.8%, or $29.4 billion, and an estimated 591,000 net new jobs.
All of this, for what the TD Bank estimates will be a rise in prices for consumers of 0.7%. A small price to pay for the benefits outlined above.
In fact, I’d make the argument that all of this economic activity will be a boon to the real estate industry in the long run.
Al R
Should mention that Mintz’s study just looks at the first 10 years after harmonization. Benefits (capital investmest, jobs, etc.) would certainly accrue beyond that.
If the final HST is lower than the current GST + PST such that we fellow citizens are compensated for the new tax imposed on the previous non-taxable items, then I can buy in. Otherwise, HST is just a way the government tries to steal money from the citizens.
Look at this. If you are now taxed on items (like milk or bread and many more that do not have to pay PST before), is it not that this is a tax hike using a beautiful word called “harmonized”. I think a more honest word is “harmful”. This is harmful to all taxpayer but happy and harmonized to the government!!
For the initial period of HST implementation, the government might give you some sweets (rebate – e.g rebate on certain house purchases) to trick you into believing that the HST really does not cost you that much. This would happen just for a short period. Soon, the government would sneakily take the rebate away so that they can finally take your money away. Do you still remember the Albertan have once been compensated by the Alberta government with rebate on gasoline expense at beginning period when the Alberta government increased gasoline price province-wide? Now Albertan are paying gasoline price much higher than that in the past. This is the same money-stealing trick used by the BC and Ontario government except that it is disguised in a name called “harmonized” sales tax.
Sure HST helps saving money in company accounting, but in an expense of the fellow citizens. And this let the government pocket more of our hard-earned money by simply saying that it is an “harmonized” way to make your life easier. Is it really to make your life easier or more difficult? I let you decide.