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!
