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BUY NOW! the HST is coming!

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59 Comments

This column in the Financial Post argues that you should BUY NOW because the HST is coming and will drive prices up.

Economist Benjamin Tal, of CIBC World Markets, predicts the tax will have an impact on housing sales. “It’s not like something you can brush under the carpet,” says Mr. Tal. “There will be reduced demand.” He predicts the industry will build more houses without all the finishings. That will leave the consumer to do work on the black market with contractors to avoid the HST. That’s what happened in the Maritimes where the HST has been in play for years, said Mr. Tal.

“This will give a boost to the under-the-table transactions. Is that an optimum thing?” says Mr. Tal.

It’s no wonder British Columbia’s housing industry is fighting the HST tooth and nail. It’s not interested in the Ontario compromise of an exemption on the first $400,000 of a home. B.C.

will provide a $20,000 tax break on the first $400,000 of a purchase, the amount being lower because the province has a 7% sales tax.

“There is no single family home here you can buy at that price,” says Peter Simpson, chief executive of the Greater Vancouver Home Builders’ Association.

Could higher taxes lead to higher demand and higher prices?  If only they had the foresight to enact this policy in Las Vegas they could have prevented house prices from dropping in half!

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Anonymous

"Something is wrong in the country when jobs that require education pay less than whatever high school dropouts can do."

What a joke…I laugh at people like you who expect to make such big money with your 'education'. Roofer here making 160K. I have a university degree, 2 diplomas, a certified teacher, but I know where the money is. If your precious education didn't show you how to follow the money and you're here complaining about it… too damn bad. Less 'grubby dropouts' like me makes our future even brighter and yours bleaker. ROFL!

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NO -LYMPICS

jesse

Re HST:

I agree with you,re; Real Estate… the HST will trickle down and affect the seller's bottom line. But these are the jaws of a vise. Everybody will then have to whip out a sharp pencil…the realtor's commissions will be cut, the tradesmen who build the projects etc.etc.

However, those now forced to pay HST on services get hit. The person how does haircuts still pays other taxes that never seem to go down(ie Triple Net), and their customers may shop around …it'll end up dog eat dog. Everybody in the food chain will lose, the underground economy will increase.

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realpaul

Take a Breather…: #48 . citizens should be writing the headlines and chasing down the cockroach politicians with the intent to bring them into the full light of day. Sunshine is the best antiseptic as they say. Writiing about fluff is disengenuous when there is so much perma- fodder for the grist of a bear it would be unseemly not to lambast the Olympic liars, fornicators, baby rapers , dictators and chiselers of the IOC for example. Whats good about that group of killers, nazi's, thugs, frauds, theives douchebags and lickspittles while they party behind police barricades with their cheap crack whores being paid in worthless Canadian dollars while thousands are freezing and starving in the very streets that have been 'wrapped' in phony banner visions of asinine glory and barbed wire? Whats good about sitting still and being nice… Read more »

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Phil

Realpaul, tell it like it is!

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Anonymous

oh.. it's permits… so i suppose unless more infrastructure projects come up, there'll be more workers for residential construction…

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Anonymous

vancouver #1. but i don't really understand if they mean in terms of permits or if it's getting cheaper…

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jesse

HST will increase prices? Really? I think it will REDUCE prices and here's why. The HST will increase Realtor transaction costs. In order for an investor to purchase real estate he will factor in the increased costs when he eventually has to sell. This means he will pay less to compensate for these costs in the future. The HST also increases, or so they say, sales cost to developers. In order for developers to make money they will only purchase land at a discount to compensate for the higher transaction costs. Both these will not increase prices but will reduce volume. Housing is unique to how it will react to increased taxes since a component of the price is in the land. Its cost can therefore immediately adjust to compensate for higher building or transaction costs. All this talk about… Read more »

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RennieWhereRU?

BC has highest rate per capita of gangsters in the WORLD. $50 billion is Canadian dope going to US per annum. Canada is biggestt exported by far of ectasy and chrystal meth to US, Asia and Australia (wonder where in Canada these drugs are made and distributed). I am in the wrong trade; perhaps I should become a gangster to buy that place in Burnaby I've always wanted. This place is an absolute joke, the biggest narco state in the world.

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Girlbear

Victoria hotel chain goes bust.

http://www.cbc.ca/money/story/2009/09/03/bc-victo…

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Elephant in the Room

49 Unfortunately, or fortunately depending on what side you sit on, ethnic politics is destructive. Catering to certain ethnic groups simply because you can secure a block vote is at best reflective of an immature democratic society, and at its worst, destructive of norms, values and principles of a democratic system. Ethnic bloc voting has been transplanted here from cultures and nations that lack sophisticated, entrenched democratic systems. It has also been fostered by our own politicians and parties. Acknowledging its existence, and its potentially (and actual) harmful effects on Canadian society is not racist as you gently imply in 49. It is an elephant in the political room that few are willing to talk about, or tackle, for fear of being labelled wrongly, or losing out on a bastion of political power – depending of course on whether you… Read more »

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Boombust

"It was basically split down ethnic lines."

Like the "vote ethnique" Parizeau complained about in '95?

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Take a Breather...

RP 47 I agree that it is important to point out fallacies, to question the sources of information, to call a spade a spade, especially in this city. You are correct, we are overly nice, and afraid to speak our minds, in part because the political correctness pendulum swung too far to the left. I think that is slowly changing, and I do applaud you in "calling people out." That being said, maintain your health over the principle of calling people out. And try, yes, try, to balance your commentary with something positive once in a while. Not because I am a hear no evil, see no evil guy, but because if you are always critical, and "negative" in the eyes of the masses, you can lose your credibility and be relegated to the corner know as "the crazy, ranting… Read more »

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realpaul

Take a Breather…: #43, thanks for your concern. Do you think that I am like Conrads character "Kurtz" in 'The Heart of Darkness' who had 'seen too much' of the world and decried "The Horror, The Horror". As endearing as that character is to us all by the fact that so many people can relate; is that truth telling and finger wagging is more castigated in this country of denial and complacency than it should be. Have we been taught to be nice or have we been subjugated into submission? My position is that it is OK to 'out' the liars, the manipulators, the slavers, the murdereres, the criminals, the frauds, the fakes, the wrong-doers, the false friends and fabricators. The country and the population would be better off if we all had a much shorter fuse and were prepared… Read more »

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NO -LYMPICS

Re HST

Gov't has lost its way decades ago.

Now it has caught up with them.

I don't see where the GST has benefitted us… wasn't it supposed to make us more competitive ? …..As our manufacturers and manufacturing base has continually collapsed ?

The HST is a RED HERRING…think inversely. Its supposed/alleged benefits are BS, its a carney barkers sales pitch, the active aim is to stick it to us come hell or high water tp fix what gov't screwed up royaly to start, they simply need to sugar coat it with "some excuse".

Fool us once (with GST), shame on you

Fool us twice(with HST), shame on us.

Democracy R.I.P.

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Vic

HST of 2010 is like GST in the 90s — nobody liked 7% taxes at the till, but we eventually got used to the idea of two sales taxes. With all the tax cuts we had in the last 5 years, I don't think we should complain about a small tax increase via HST. Certain things will get cheaper (like Hotels..since there will be no 15% hotel tax) and others will get more expensive (like dining out). Its all a wash in the end. Of course….giving our provincial and federal government's financial mismanagement, I expect to see a long list of tax increases in the future — starting with 7% GST and income tax increases. If you think taxes are high now, its going to be much worse later. Somebody has to pay for "The Great Stimulus Package". As for… Read more »

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NO -LYMPICS

Anecdote:

Just out of curiousity,a few years back , I attended the Liberal nominating convention in Richmond,(BTW I an NOT a Liberal supporter) where Raymond Chan tried to win back the Liberal nomination from Joe Peschisolido ( who had crossed the floor to become a Liberal MP ).

Almost exclusively, Chan had the Chinese supporters and Peschisolido had the East Indian/ South Asian vote. It was basically split down ethnic lines. There were several hundred people there, but I don't think there was more than say 20 of European descent.

That pretty much says it all.

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Take a Breather...

Realpaul,

As much as some of your RE rants are applicable, you need to take a breather from rants on every subject under the moon.

I empathize with many of your comments on politics, the state of the economy, and immigration, but take a deep breath. When one reads your comments, you can sense your fire and spit, your anger, disbelief and disgust, all of which are not good for one's health in the long term.

Continue to be skeptical and critical, but make sure the disjuncture between your values and the current operation of the world does not get the better of you.

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realpaul

NO -LYMPICS: #41 I can't forgive the power grubbing, malicious Liberal elite for denying democracy to the grass roots of their own party and crowning Ignatieff instead of having a leadership election. What does this say about the Liberal elite and what they truly stand for? Are they planning to rule Canada by acclimation? They are a No Democracy Party and that should tell everyone what is at the heart of the Liberal Elite and their leader Ugnatieff. Who in their right mind would have accepted a position that way in the first place? You would have to be a complete idiot to lead an exercise in killing democracy and be so full of your own ego that you could think it possible to become a king in a Canada that values democracy above all else. The Ontario media is… Read more »

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NO -LYMPICS

Post 39 and 40 realpaul:

Well said:

I don't think the Tories really care if an election is forced and they lose. They are in a no win situation re: the economy. As you say, all the indicators are interest rates will rise.

I see Ignatieff as our own version of Obama.

Pole – vaulted forward from a literal obscure political unknown to the top job and THEN be lead by the nose by Goldman Sachs alumuni( like BoC's Carney ) in key positions.

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realpaul

Even in a city the size of Bangkok, having 22 major hotels for sale at one time is extraordinary.

And PS, does it seem coincidental that all the sudden announcements about interest rate hikes, exit strategies and a new fiscal direction for credit has been in the news just days immediatley after the G20 meeting? I think Carney, Geitner and co., got their cllective pee pee's slapped. I think back to what the Chinese minister said

" The US should no longer over estimate the role it has to play in the global recovery." SSSSSSSSSSLLLLLAAAPPP !!!!!!

http://www.bangkokpost.com/business/economics/234…

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realpaul

I just listened to Mr. Flahertys speech in Victoria. The highlight to me was the hint dropping about how far in the stinkhole we really are. "The weakness will continue and deficits will be larger over the next two years will be larger than anticipated. The basis for a recovery is not yet certain". KABAAAM !!!! So, the threat to raise interest rates is not based on economic recovery. I surmise they have run out of credit at any price and are being told that credit will cost more whether Canada likes it or not. Oh to have been a fly on the wall at the G20 closed door meetings when the US and Canadian governments were told by the international club that a time line was being imposed. Our brave leaders are not telling us the whole story. Flarhety… Read more »

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oneangryslav2

realpaul:

"Markets have a funny way of dashing the dreams of the majority while leaving only the wise few intact."

Absolutely correct.

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NO -LYMPICS

From Garth's blog QUOTE: Mark Carney is a lot of things, but stupid’s not among them. The central bank boss knows he’s playing a high-stakes game of rate roulette, aware ultra-low rates can do as much damage as good. While he was desperate to prevent a deflationary spiral, he’s now adamant to deflate an uncontrollable bubble with but one outcome. At least one economist has found the courage to state that clearly. Carlos Leitao, of Laurentian Bank, is warning Canadians to prepare for “aggressive” interest rate increases once Carney pulls the trigger. That will likely happen in about nine months, after unemployment peaks in early 2010. “An aggressive tightening – rather than a gradual one – will be necessary because rates are extremely low,” he says. “A measured pace would not be appropriate to ‘normalize’ rates when the starting point… Read more »

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NO -LYMPICS

scoop:

The HST is claimed to be revenue neutral, ie the Gov't will not take in extra taxes over and above what they already take.

Total BS, HST is insidious.

When the plan is to reduct the taxation on certain groups and make up the diference elsewhere, AND to achieve this it comes out of OUR pockets, that's simply semantics . HST ,one in place, will then be ratcheted up to make up for future deficits.

RE costs will go up, and they will be absorbed in the mortgage payments of many, ie you will be paying interest on the HST , thats discussed by many experts.

I don't believe the so called HST beneficiaries (no longer pay the PST)will benefit our economy, simply their own bottom line, their won't be much trickle down effect.

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realpaul

Scoop:

#33, history

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