Making room for a new tax

KERRY GOLD
From Friday's Globe and Mail
Published Thursday, Sep. 23, 2010 1:52PM EDTOther than the build-up to it, general industry response would suggest the Harmonized Sales Tax has had relatively little impact on the B.C. housing market.

"On the whole, the HST’s effect on the market has been more psychological,” says Dan Scarrow, vice-president for Macdonald Realty in Vancouver. “Buyers rushed to buy before July 1st, then sat on their hands for the months following its introduction to see what would happen to the market.”
The underwhelming effect might be due to the fact that the HST only applies to newly built housing, and closing costs, such as inspections, legal fees and commissions. As well, the government offers rebates on houses that are priced lower, thereby exempting a whole demographic of new home buyer. In theory, lower construction costs should close the gap between pre-HST pricing and post-HST pricing

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