NEW HOMES GET MORE EXPENSIVE THIS THURSDAY!

The much anticipated and hated HST (Harmonized Sales Tax) kicks-in Thursday (July 1, 2010).


The Bottom line is that the cost of buying a home in B.C. is going up!

There is no change on the purchase price of a resale home. However, the tax does add to the cost (+7%) of services provided such as; Real Estate, Inspection and Appraisal fees. *Legal fees remain the same as Lawyers have been forced to collect this amount for years.

New homes are a different matter with a marginal tax increase if the purchase price is under the $525,000 threshold. But the tax increase can be a significant (tens of thousands of dollars) for those purchasing over the threshold amount. Call it a new "luxury tax" of sort.

It will be interesting to see how this plays out but I suspect that many developers will use additional incentives/rebates to attract local buyers and help soften the blow, much in the same way they did when GST (Goods and Services Tax) was implemented many years back.

Out of country, luxury home shoppers will likely see this tax as a small part of the cost of buying. Today, many of these buyers are from China and they still consider Vancouver a very desirable, relatively inexpensive market when compared to other, major world class cities.

Oh yes, Happy Canada Day.

Wayne



Above information is approximate only & should not be relied upon for its accuracy. Please seek independent legal and/or accounting advice.

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