The Urban Development Institute wants the province to immediately exempt all new homes from the provincial tax portion so the HST hit is no longer an issue for prospective home buyers who may delay purchases.

HST repeal lag impacting home construction jobs

Industry outlook darkens as buyers wait for lower tax.

The province is under pressure to quickly neutralize the impact of the Harmonized Sales Tax on new home buyers in order to save thousands of jobs at risk in the construction industry.

The HST is to be eliminated no later than April of 2013, but until then it continues to add seven per cent to the value of new homes over $525,000.

The Urban Development Institute wants the province to immediately exempt all new homes from the provincial tax portion so the HST hit is no longer an issue for prospective home buyers who may delay purchases.

“We are very concerned that there’s going to be a significant reduction in jobs for the next year,” executive director Maureen Enser said.

“They’re going to remove the HST eventually so why not make people whole today?”

Enser estimated at least 2,000 planned home starts have now been shelved since the HST referendum result and many more are likely. Each unit typically represents up to four industry jobs.

Even if the province doesn’t expand the rebate to all new homes, she said, business would be better if developers at least knew for certain the rules in the months ahead and the timing of the switch from the 12-per-cent HST back to a five-per-cent GST on new home sales.

Pre-sale agreements with buyers are critical to financing many developments, but Enser said those contracts are nearly impossible to sign when tax implications are uncertain.

Some buyers are waiting until the HST is repealed to purchase and Enser said that may make it harder for developers to liquidate existing units and then reinvest in new projects.

Peter Simpson“This has been a gong show since day one,” said Greater Vancouver Home Builders’ Association CEO Peter Simpson (left).

He said the impacts go beyond actual builders and renovators to workers in local plants that make components like doors, windows and flooring.

“I don’t think they have a good understanding of what this ripple effect of fewer housing starts is going to have.”

Although housing starts in the region are currently running ahead of 2010 levels, Simpson said the vast majority of new construction is in multi-family units mainly priced under the $525,000 threshold.

More expensive single-family house starts are way down, he said.

Simpson said the province could use short-term tax credits or reduce the Property Transfer Tax to offset the lingering impact of the HST until it is repealed.

Large renovations are also taxed more under the HST right now than they will be once B.C. returns to a PST and GST system.

Urgent repairs like leaky roofs are going ahead, but Simpson said many homeowners will hold off on discretionary work, such as a costly kitchen upgrade.

A spokesperson for finance minister Kevin Falcon said no special arrangements are planned for home builders.

Just Posted

Former Surrey First Councillor Bruce Hayne to run for mayor

Hayne says it’s the ‘worst kept secret in Surrey’

Canada beats Triple Crown for Canada Cup title

National team’s championship is first at tournament since 1996

VIDEO – UPDATED: Cloverdale’s cancer fundraising country concert surpasses the mark

Organizers confirmed Sunday night that Gone Country - Here for the Cure raised more than $651,000.

Fraser Surrey Docks mechanic dies on the job

‘This is a very sad day - a worker went to his job this morning and didn’t go home’

BC Games: Day 3 wrap and closing ceremonies

The torch in the Cowichan Valley has been extinguished as Fort St. John gets ready to host the 2020 BC Winter Games

5 to start your day

The mercury’s rising on B.C.’s south coast, a man extradited from Korea on murder charges and more

Heat wave hits B.C.’s south coast

Temperatures expected to hit the mid-30s in some areas

Man charged in 2006 Burnaby murder extradited to Canada from South Korea

28-year-old Jui-Kai Weng was charged with second-degree murder and attempted murder

Soaring temperatures, high winds could worsen fires in B.C.’s southern Interior

Environment Canada’s forecast for the next week in the southern Interior does not inspire confidence, with temperatures in the 30s and winds gusting over 40 kilometres per hour.

Iran dismisses Trump’s explosive threat to country’s leader

Trump tweeted late on Sunday that hostile threats from Iran could bring dire consequences.

Update: Police probe Toronto shooting that killed 2, injured 12; suspected gunman dead

Paramedics said many of the victims in Danforth, including a child, were rushed to trauma centres

Why do they do it? Coaches guide kids to wins, personal bests at the BC Games

Behind the 2,300 B.C. athletes are the 450 coaches who dedicate time to help train, compete

Most Read