Regardless if you agree with the latest Ipsos Reid poll stating that the Liberals intentionally misled voters, the HST will be a reality next summer.
The upcoming HST will highly impact new homebuyers and home renovation projects next year by adding a staggering 7%. That is why smart homebuyers are acting now rather than wasting time debating it on the radio open phone lines. They realize that a 7% increase next year actually means a 7% discount right now. It may not seem like a lot in minor purchases, but if you do the math for a new home project, it actually computes to a substantial amount. The average new home construction is about $400,000.00 in Vancouver. About half of this cost is labour, which is currently only taxed at 5%. So next year, every trades person is forced to include an additional 7% premium on their services which works out to be $14,000 for the average new house construction; that’s enough to buy you a gas-saving economy car! If that’s still not tangible to you, then forget the math and think about this; When was the last time your realtor gave you a car for buying a house from them? This is what it’s like if you act now, before the HST happens. Recently speaking to a professional design colleague in Ontario, she noted that there was a boom in the residential market after the HST was announced. Shrewd homeowners moved ahead with their projects so they can take advantage of the tax savings. Many homeowners in BC are currently put in the same position. Those who have been contemplating on construction projects now have an urgency to move ahead. This will create a demand for trades people and because of this, quality project teams will be scheduling work months in advance. It is prudent to act quickly so you have a talented design team who will be ready to work on your project.
In addition, there are signs that the recession is over and the current low interest rate is bound to go back up. Although July was a record month for home sales, there are still some good buys out there and prices have not returned to their highest levels. So with record low borrowing rates and prices off from their highs, now is a great time to invest in a new home or renovation.
I can’t predict if the BC Liberals will get another term, but I can predict the HST will be a reality and I can predict many people will be complaining that they have to pay 7% more than they had to. So if you’re one of those sitting on the fence about your new construction or renovation project, contact us at www.victoreric.com and we’ll give you a free project analyst and help you determine if now is a right time to start.