HST and new homes

HST is set to be implemented on 1 July 2010 and would increase the price of new homes by 7% minus a maximum of $26,250. It would also increase the tax on many other items by the same percentage: second hand cars, all services, restaurant meals, hairdressers, gym memberships, etc. This evening the anti HST campaign of Bill vander Zalm was officially launched in Kitsilano, the riding of Premier Gordon Campbell who introduced the HST.

The taxes you pay when buying a new home in Vancouver

A few days ago Harvey Enchin analyzed in an article in the Vancouver Sun the taxes paid by a Vancouver new home Buyer. He concluded that when buying a new detached home for $564,933 the total amount of taxes paid for the house from the purchase of the lot to and including completion by the Buyer is $76,724 - this includes property transfer tax and HST and the rebate of $26,250 for the Buyer of a primary residence.

13.58% of the amount the new home Buyer pays for his/her home is tax! Since the maximum HST rebate is $26,250 the tax percentage increases as the purchase price of the house increases.

HST and real estate

Is HST going to be applied to the purchase of newly built real estate? Will Buyers of new development after mid 2010 have to pay 12% HST on the purchase price instead of the current 5%GST? I hope Real Estate organizations will be able to negotiate an exemption of the additional 7% tax on purchases of newly built real estate as the restaurant owners have done for their purchases/sales.