An Update on HST And Housing
Regular readers will remember this post where I outlined my concerns about HST and the effect it will have on the housing market, and in particular those people who make a living from building homes.
Today I received an announcement from the local real estate board that updated us on the issue’s development and it seems there has been some improvements made but I am still concerned about the effect it will have on builders in higher priced areas like Vancouver and Victoria as $525,000 isn’t very much for a new home there. Here in Nanaimo though, that’s a pretty nice home, even for a new one.
I am still concerned though that as Realtors, this will mean a 7% increase in what it costs to hire us. This will affect our industry. There are also the high end builders who will now be trying harder than ever to build home that come in under the wire of $525,000.
The announcement in question follows:
HST transitional rules on housing
- Generally, builders’ sales of newly constructed or substantially renovated homes would be subject to the provincial component of the HST where both ownership and possession of the home are transferred after June 2010. Grandparenting would be provided for certain contracts.
The proposed transitional rules for new housing, including builder reporting and disclosure requirements, would be administered by the CRA.
Generally, sales of new homes under written agreements of purchase and sale entered into on or before Nov. 18, 2009, would be grandparented, such that these sales would not be subject to the provincial component of the HST and would not be eligible for B.C.’s housing rebates.
Grandparenting would be provided for newly constructed or substantially renovated single unit homes, including detached homes, semi-detached homes, and attached homes.
Grandparenting would not apply to traditional apartment buildings, mobile homes (including modular homes) and floating homes, as the general transitional rules would apply differently to those homes. However, these homes may qualify for B.C. housing rebates.