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Media message re: Harmonized Sales Tax

Media message re: Harmonized Sales Tax

I have been asked by the media for the Fraser Valley Real Estate Board’s position on the newly proposed Harmonized Sales Tax (HST).

The BC government announced on July 23, 2009 that effective July 1, 2010, BC will adopt the HST, combining BC's seven per cent PST with the five per cent federal GST for a single sales tax rate of 12 per cent.

As I explained to reporters, given our industry had no prior consultation with the government before the announcement, we don’t yet know all the implications.

We do know that the proposed HST will affect home buyers. Consumers will have to pay a higher tax on new houses, renovations, REALTORS®' fees and other real estate transaction fees such as notary services, home inspections and appraisals. All of those are currently exempt from the PST and are only subject to the GST. Under the new proposal, they will be subject to a 12 per cent HST tax.

Along with representatives from the BC Real Estate Association (BCREA) and the Real Estate Board of Greater Vancouver, I have shared with the media our belief that the HST will result in a significant increase in cost to the real estate buying public, both for resale and new homes. We are opposed to that.

We, and many other industries, would have appreciated an opportunity to talk with the government before they rolled out the decision. Right now, we’re conducting research to try to help members understand the full impact of an HST and will keep you posted as we learn more. We're also exploring strategies for voicing our opposition of this new tax to government.

BCREA is working on a response to the BC government focusing recommendations to keep the impact of the HST as neutral as possible with respect to housing attainability. Look for their opinion editorial on the topic in the Vancouver Sun on Wednesday, July 29.

In the meantime, please let me know your thoughts: paul.penner@fvreb.bc.ca.

Paul Penner
President

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