HST does not apply to resale homes
Georgia Straight, August 18, 2010
By Charlie Smith
A Vancouver mortgage broker says some real-estate agents are unaware that the harmonized sales tax does not apply to resale homes. In a phone interview with the Straight, Jessi Johnson said that even though the 12-percent HST has been part of the public discussion for quite a while, there are a number of people in the industry who still aren’t clear on where it applies.
“There are a lot of false fears about HST,” Johnson said. “HST only affects new construction.”
He declined to identify the agents who were ignorant about this issue.
Johnson noted that the HST took effect on July 1, just as the housing market was undergoing a transition from a seller’s to a buyer’s market. “Anytime you transition in that period, you have a dead zone,” he claimed. “The problem is that in that dead zone, the false fears around HST came right around that same time. I don’t know if that was circumstantial, coincidental, or whatever, but it caused a really dead point in the market for me.”
He mentioned that during a two-week period in July, he had approximately one mortgage application, whereas his company normally processes 10 applications a week. “That was shocking,” Johnson said.
He emphasized that since then, the housing market has picked up.