BC = No HST, and That’s Good News for the Housing Market!

Last week’s referendum in British Columbia to scrap the HST had just about every Canadian wondering if the same thing could happen in their own province. In some maybe; in Ontario, no. Laws are different here and as such, we’re likely to live with the HST until some good-loving politician gets rid of it. But the people of BC are currently rejoicing and it’s no wonder why. With HST gone, residents are going to pay nearly half what we do in taxes for the things we buy, and that includes big purchases like a home mortgage.
The good news is really very simple: less taxes, less taxes, less taxes! But it can still sometimes seem like a balloon statement and while lowering taxes is always a good thing, just what kind of reality are we talking? Well, currently with the HST law still standing, a home in Vancouver that costs $750,000 (the average price of a home in that city right now) has to pay a whopping $63,750 in HST. But when the province goes back to the old-school GST-only program, that same house will come with only $24,000 in taxes, almost one-third of the cost.
While the news would have been good for any province, it’s especially sweet for British Columbia. Mortgage brokers, real estate agents, and anyone in the BC housing market have become increasingly worried about the rise of housing costs. With the average price edging closer and closer to the $1 million mark, a lot of homes, and condos especially, sit empty on the BC market, particularly in Vancouver. The news means that more home buyers will get out there and start picking up those properties, and that the housing market may continue on its prosperous cycle once again.
But hold up. The news is good – awesome really! But it won’t come for some time, 18 months to be exact. While the referendum went through and the law was definitely passed to get rid of HST in British Columbia, it’s not actually going to be in place until March 2013. That means that while at that time, mortgage brokers and agents can all start to relax, they’re still going to have to try and find a way to get rid of those properties in the meantime. Here’s hoping that the government, now starting to feel the pinch to get this thing gone and done with, can speed up the process and get the market rolling before even then.