Skip to Navigation | Skip to Page Content
Watch our short video of the views from the available home sites at Kettle Ridge.
If the following link does not take you there immediately, paste and copy it into your browser.
http://www.youtube.com/watch?v=NVjLSF4yyzs
Enjoy!
For more information, call 1 877 853 8853.
The gorgeous views at Kettle Ridge made it a natural choice for a plein aire painting workshop held through the Penticton Art Gallery. Eight local artists gathered on site to capture the natural beauty of the area in their watercolour sketchbook journals. The workshop was led by Carol McQuaid, who does double duty as artist/workshop leader and Director of Sales and Marketing for Kettle Ridge.
“Every day I’m blown away by the incredible views here” says McQuaid. “It was great to have the opportunity to share this with some fellow painters.”
Watch for upcoming posts featuring artists renderings of the Kettle Ridge views.
We’re excited to share the most recent renderings of this beautiful home, slated to be built on the keystone lot of Phase 1 at Kettle Ridge.
Looking out at the views from each of the remaining Kettle Ridge homesites, it’s easy to see what’s attracting people to this new Naramata neighbourhood. These final six sites all boast spectacular vistas of Lake Okanagan. With our landscaping starting to take shape and Spring Winefest just around the corner, it’s a great time to come up and see it all for yourself.
Contact us for photos of specific sites
MEDIA RELEASE
For Immediate Release:
March 5, 2010
Okanagan Housing Market Continues to Strengthen
Kelowna, BC – The Central Zone of the Okanagan Mainline Real Estate Board (OMREB)
reported February 2010 sales activity of all MLS® property types improved over 2008 and the
early part of 2009 as the housing market continues to strengthen and gain momentum.
“This month’s figures demonstrate ongoing consumer confidence in the Okanagan market as
sales activity remains strong and listings continue to increase,” says Brenda Moshansky,
OMREB Director and REALTOR® in the Central Zone. “While inventory is down 8% from last
February (4,418 units compared to 4,848), a wider selection of properties is now available to
Buyers as new listings have increased 23% from last year (1,098 compared to 888) and are up
7% over January (1,021).”
Total sales of 289 units jumped 78% last month from the 162 sold in February 2009 and rose
14% from the 252 sold in January. The 249 residential units sold showed a 64% improvement
over last year at this time (151) – a 13% increase from last month (219).
Sales of 123 single family units were up 43% over last February (123 from 86) – similar to sales
in January (122). Townhouse and apartment sales improved 77% (32 townhouses sold
compared to 18) and 90% (57 apartments from 33) over February 2009.
“We are optimistic that the upcoming changes to mortgage criteria in mid-April, the pending HST
in July, and potentially higher mortgage rates in the future could generate more sales in the
coming months,” Moshansky notes. “As the unseasonably warm weather brings people out and
about – especially during Spring break and now that the Olympics are over, we can expect the
low interest rates and attractive home prices to drive first-time Buyers into the market, and to
draw investment and recreation property buyers away from high prices in the Lower Mainland.”
Brenda adds, “The guidance of a REALTOR® to help determine market value in this competitive
marketplace is important for both Buyers and Sellers. If a home is priced well it will sell.”
The Central Zone of OMREB covers an area from Peachland to Lake Country and east along
Highway 33 to Westbridge (including the Christian Valley).
The Okanagan Mainline Real Estate Board (OMREB) is comprised of 1,152 member
REALTORS® and 86 real estate offices in the Southern Interior of BC. For the most
comprehensive source of all real estate listings, home buying and selling information, visit our
national websites at www.realtor.ca and www.icx.ca. Our local public website is available at
www.omreb.com. All OMREB listings are published in the MLS® Real Estate Review magazine
available at all real estate offices and various locations in the Central Okanagan, North
Okanagan, the Shuswap and Revelstoke areas.
For comprehensive Board-wide statistical information please visit www.omreb.com
What is the Harmonized Sales Tax (HST)?
On July 23, 2009, Premier Gordon Campbell and Finance Minister Colin Hansen announced that, effective July 1, 2010, BC will adopt a Harmonized Sales Tax (HST), combining the 7% Provincial Sales Tax with the 5% federal Goods and Services Tax for a single sales tax rate of 12%. The federal government will provide BC with $1.6 billion in transitional funding.
For consumers, goods and services (with some exceptions) will be subject to the HST in the same manner as they are currently subject to GST. Therefore, all items on which GST is not payable, such as basic groceries, prescription drugs and medical devices, would also not be subject to the HST. (Source: BC Government website, www.gov.bc.ca/hst/faq.html, accessed September 28, 2009)
What has to happen before the HST takes effect?
* The provincial and federal governments will continue to negotiate terms, with negotiations expected to be complete by the end of September.
* Ideally, the provincial government will consult with British Columbians throughout late 2009 and early 2010.
* The provincial government will introduce enabling legislation in spring 2010.
* The legislation will be debated in the legislature and go through the formal process of readings and committee hearings.
* The federal government will have to seek the approval of the Governor in Council to enter into an agreement under Part III.1 of the Federal-Provincial Fiscal Arrangements Act consistent with the terms of the Memorandum of Agreement, signed in July 2009.
* Assuming the both pieces of legislation receive Royal Assent, the HST will take effect on July 1, 2010.
top
Exactly how will the HST be applied?
The provincial government released the General Transitional Rules for BC on October 14, 2009. These rules address commercial property, commercial leases, construction and renovations, see below for new residential housing rules. Click here for the General Transitional Rules for BC.
On November 18, 2009 the provincial government released the Residential Housing New Housing Rebates and Transitional Rules for BC. To read the news release and backgrounder click here. Click here for the Residential Housing New Housing Rebates and Transitional Rules for BC.
Was BCREA consulted before the Memorandum of Agreement was signed?
No. The provincial government did not consult with any sector in advance.
How will the HST impact the real estate sector?
As proposed, the HST will increase the cost of buying or selling all types of property and becomes essentially an additional tax on home ownership. REALTOR® commissions, appraisals and other services will be subject to a 12% HST, replacing the 5% GST now charged, and new homes will be subject to the full HST.
The HST would generally apply to a supply of a service to the extent that the service is performed on or after July 1, 2010. The HST would generally not apply, however, to a supply of a service if all or substantially all (90% or more) of the service is performed before July 2010.
For more information and to see the General Transitional Rules for BC, click here. For the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
Will HST apply to commercial transactions and leases?
The HST will apply if ownership and possession are transferred to the buyer on or after July 1, 2010.
According to a July 28, 2009 article by Clark Wilson LLP’s Commercial Real Estate Group, commercial sales and leases will not be materially impacted by the new system. The 12% HST will apply on commercial sales and leases, just as the 5% GST does under the current system, and input tax credits will be available to tenants and buyers for the full amount paid.
According to BDO Dunwoody, the net effect of an HST sale of a commercial building should be zero if the purchaser is a GST/HST registrant and uses the building entirely in commercial (taxable) activity. The HST charged on real estate commissions to sellers of commercial real property should be fully recoverable, provided the seller is an HST registrant and was using the land exclusively in commercial activities.
For more information and to see the General Transitional Rules for BC, click here.
top
What about residential leases?
According to BDO Dunwoody, leases of residential property that were not subject to the GST will also not be subject to the HST. However, it is important to note that most, if not all, of the costs associated with the rental of residential property that were subject to the GST will become subject to the HST as of July 1, 2010. Since the anticipated increase in costs for residential landlords cannot be claimed as an input tax credit, it will be imperative for residential landlords to review their leases with legal counsel to determine if an increase in rent to account for the additional tax can be applied.
Will property managers be affected?
Yes. Property management services are typically subject to GST, and will become subject to the HST. According to BDO Dunwoody, depending on the nature of the property being managed (i.e., commercial vs. residential), and the GST/HST registration status of the owner of the property, the increase from the 5% GST to the 12% HST may not result in any additional cost for the owner. If the owner is entitled to a full input tax credit for GST purposes, they should be entitled to a full input tax credit under the HST. If the owner of the property is not registered for the GST or is not entitled to a full input tax credit (e.g., the property is a residential apartment building), the additional 7% of the HST will become a cost for the owner.
How will bare land be impacted?
According to BDO Dunwoody, the sale of land is currently the one supply where the GST may become collectible, regardless of the GST registration status of the seller. With the implementation of the HST, land sales that are subject to the 5% GST will become subject to the 12% HST. Any person who sells land should determine whether the HST is applicable to the sale. PST does not apply to the sale of bare land.
GST taxable sales of bare land do not require (or allow) for the seller to collect the GST from the buyer if the buyer is registered for the GST at the time of the sale. These same rules are expected to apply for the HST. A seller who makes a taxable sale of bare land to a buyer who claims to be registered for the HST should verify the HST registration with the Canada Revenue Agency (CRA). The CRA has established its own website (www.cra-arc.gc.ca/esrvc-srvce/tx/bsnss/gsthstrgstry/menu-eng.html) that allows a person to verify the registration status of a seller.
When a buyer who is registered for the HST acquires land that is subject to the tax, they are required to self-assess the HST payable on their HST return. Generally, when the land is used more than primarily (50%) in the buyer’s commercial (taxable) activity, a full input tax credit can be claimed on the same return. The reporting of the self-assessment and the entitlement to claim a full input tax credit should result in no net tax for the buyer.
The HST charged on real estate commissions related to sales of bare land should be fully recoverable, provided the seller is an HST registrant and was using the land exclusively in commercial activities.
top
When does HST become payable?
BDO Dunwoody anticipates transitional rules similar to those imposed for other harmonization and used in the recent federal reductions of the GST. If these rules apply, where a purchase and sale agreement for a new home is entered into on or after July 23, 2009, and ownership or possession of the house is given to the purchaser before July 1, 2010, the GST at 5% should apply to the sale. For new homes where the purchase and sale agreement is entered into on or after July 23, 2009, and both ownership and possession is given to the buyer after June 30, 2010, the HST at 12% is expected to apply to the sale.
For new homes where the purchase and sale agreement was entered into with the buyer before the July 23, 2009 government announcement, it is expected that only the GST at 5% will apply, regardless of when ownership and possession transfers to the buyer.
Is there any relief for buyers of new homes?
To offset the increase in costs, the Government of BC plans to offer a partial rebate of the provincial portion of the HST for new (and substantially renovated existing) housing to ensure that new homes up to $525,000 will bear no more tax than under the current PST system, while homes above $525,000 will receive a flat rebate of $26,250. New home sales over $525,000 will be impacted, as buyers will have to pay an additional 7% tax less the $26,250 flat rebate.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
How will the proposed rebate for new and substantially renovated existing homes work?
Proposed to Take Effect on July 1, 2010
Tax: 12 per cent HST
New Home Price Level
Rebate Up to $350,000
Partial Rebate on Federal Portion of HST (GST)
71.43% Rebate on Provincial Portion of HST
Government expects total impact to be equivalent to existing tax system before July 1, 2010
$350,000 t0 $450,000
Rebate on Federal Portion of HST (GST) clawed back (straight-line method)
71.43% Rebate on Provincial Portion of HST
Government expects total impact to be equivalent to existing tax system before July 1, 2010
$450,000 to $525,000
71.43% Rebate on Provincial Portion of HST
Government expects total impact to be equivalent to existing tax system before July 1, 2010
Over $525,000
$26,250 Fixed Rebate on Provincial Portion of HST
Existing System Before July 1, 2010
Tax: 5 per cent GST
New Home Price Level Rebate
Up to $350,000
Partial Rebate on Federal Portion of HST (GST)
$350,000 to $450,000
Partial Rebate on Federal Portion of HST (GST) gradually eliminated
Over $450,000
No Rebate
top
Why was $525,000 chosen as the threshold for the rebate for new homes?
On November 18, 2009 the provincial government announced the HST transitional rules on housing which includes a threshold increase from $400,000 to $525,000, moving the threshold to above the median new home price in the province. The original $400,000 threshold reflected the median price of new housing in urban areas in BC in 2008. Homes priced above $525,000 will receive a flat rebate of $26,250. The rebate will be available whether the new housing is to be owner occupied or rented.
According to the government news release announcing the transitional rules, the limit was increased due to feedback from consumers and the industry. To read the news release and backgrounder click here.
For more information and to see the Residential Housing New Housing Rebates and Transitional Rules for BC click here.
How will the HST apply to construction and renovation projects?
The HST would generally apply to progress payments on contracts to construct, renovate, alter or repair real property to the extent that the progress payment can reasonably be attributed to property delivered or services performed on or after July 1, 2010.
In the case of written contracts to construct real property where it can be reasonably expected that the contract will require more than three months to complete, if the construction is substantially completed (90% or more) before June 2010, the construction would be deemed to have been substantially completed on June 1, 2010. Pursuant to the general GST rules, any consideration or part of the consideration payable on such a contract that had not been paid or become due on or before July 31, 2010 would be deemed to have become payable on July 31, 2010 and any portion of such payment attributable to construction on or after July 1, 2010 would be subject to the HST.
The progress payments rule would not apply to sales of newly constructed or substantially renovated homes, which would be subject to the transitional rules for new residential housing, which have yet to be released.
For more information and to see the General Transitional Rules for BC, click here.
How will the PST transition work for residential construction contracts?
According to the General Transitional Rules for BC, regarding residential property, a PST rebate would be available to provide relief in respect of the PST embedded in construction materials used in residential real property contracts that are subject to the HST. This rebate would be available to a real property contractor for the PST paid on construction materials that are purchased or produced for the contractor’s own use, held in inventory at the end of the day on June 30, 2010 and used in a residential real property contract to which the HST would apply.
The rebate would not be available in respect of inventory for which the PST is otherwise recoverable by the contractor or any other party.
Qualifying residential real property contracts would include contracts to repair or improve land and items permanently attached to land, such as buildings and patios. Residential real property contracts for repair or improvements to rental housing, condominium and apartment buildings and long-term residential care facilities may qualify for this rebate.
For more information and to see the General Transitional Rules for BC, click here.
top
How will the HST work with the Property Transfer Tax?
In the case of new housing, where GST applies, the GST is not included for the purposes of determining the fair market value of the property. Similarly, the HST would not be included in the fair market value of the property for the purposes of determining the PTT payable. (Source: BC Government website, www.gov.bc.ca/hst/faq.html, accessed July 28, 2009)
This additional layer of taxation enhances the already heavy burden carried by BC homebuyers. Therefore, BCREA is focused on achieving fairness for consumers.
How will presales be affected?
On July 1, 2010, many homes in BC will be partially constructed or the subject of incomplete transactions. While no transitional rules have been announced by the BC government to date, they are expected to be similar to those created for Ontario, where a similar HST will come into effect on July 1, 2010. Ontario’s transitional rules were recently released and are available here. (Source: Clark Wilson LLP, Commercial Real Estate Group, “BC’s HST and Real Estate,” BCRELinks website, www.bcrelinks.com/articles/dtd10.htm, accessed July 29, 2009)
According to the Ontario transitional rules, the rebate would generally be calculated as a proportion of the estimated embedded RST in the newly constructed or substantially renovated home, based on the degree of completion of the home as of July 1, 2010. If a written agreement of purchase and sale for a newly constructed or substantially renovated home or rental home is entered into after June 18, 2009 and before July 1, 2010, the builder would be required to disclose in the written agreement whether the provincial portion of the proposed single sales tax would apply to the sale and, if so, whether the stated price in the agreement includes the applicable provincial portion of the proposed single sales tax, net of the new housing rebate.
top
How will businesses be affected?
The provincial government describes the HST as a value-added tax, because it reduces the burden on business. In a July 2009 Tax Bulletin, BDO Dunwoody identifies two key benefits:
* Recovery of PST
Unlike the GST, BC businesses pay PST on many business inputs with no ability to recover the tax. This embedded PST becomes part of the costs of the business. Examples of unrecoverable PST include the PST incurred on fixed-asset purchases or goods that are used in the business (i.e., not resold to customers). Under a harmonized sales tax system, input tax credits will be available to recover the provincial component of the tax, which will result in lower costs—savings that can be passed on to consumers through lower prices. (Note: the provincial portion of input tax credits will be restricted during the first five years of the new system for certain purchases by financial institutions and businesses with taxable sales in excess of $10 million annually, and after that, full input tax credits will be phased in over three years. If the fiscal situation permits, the temporary restriction may be phased out sooner.) In addition, PST will not be charged on certain costs incurred by REALTORS® and brokerages, which may result in some savings.
* Reduction of Paperwork
Instead of dealing with two sales tax systems, businesses will find their compliance burden substantially reduced by a harmonized sales tax system. There will only be one tax collector—and as a result, only one sales tax return to file. Businesses will no longer be subject to sales tax audits by two levels of government. Purchase exemption certificates, which allow for the purchase of certain business inputs to be exempt from PST, will become a thing of the past as the provincial component of an HST will be recovered by claiming an input tax credit. For entities that are eligible to claim full input tax credits, there will also be no need to self-assess any sales tax on goods purchased from non-registered vendors that are used in a business in BC, which is something PST auditors currently look for on tax audits.
Businesses will also have to convert their systems to accommodate the HST. Invoices, sales receipts, purchase orders and expense reports will likely require modification.
What are the benefits for non-profit organizations, such as BCREA and the real estate boards?
Eligible non-profit organizations will receive partial rebates.
top
What is BCREA’s position?
The British Columbia Real Estate Association looks forward to working with the provincial government to keep the impact of the HST as neutral as possible to ensure the attainability of housing for British Columbians. To that end, BCREA recommends the provincial government:
1. Keep the costs associated with buying and selling new homes, existing homes, commercial properties and major renovation projects neutral by way of an exemption of the tax proposed on the fees of home inspectors, appraisers, real estate licensees and notaries’ conveyances.
2. Increase the rebate threshold on new housing from the proposed $400,000 to $500,000, with the threshold indexed for inflation and adjusted annually.
3. Amend the flat rebate of $20,000 to a fixed percentage rebate of 4% for new homes over the rebate threshold.
4. Implement a three-year phase-out of the Property Transfer Tax to restore fairness for buyers and uphold the principle of tax neutrality:
* Starting on July 1, 2010, increase the 1% tax threshold to $500,000
* Starting on July 1, 2011, no Property Transfer Tax on homes under $500,000
* Starting on July 1, 2012, remove the Property Transfer Tax.
How can REALTORS® and British Columbians help mitigate the negative impact of the HST?
Click here to send a message to Premier Gordon Campbell, Finance Minister Colin Hansen and your local MLA.
Who will administer the HST?
The BC HST will be administered by the Canada Revenue Agency, allowing the province to save an estimated $30 million annually in administration costs.
How many other provinces have an HST?
Four: Newfoundland and Labrador, Nova Scotia and New Brunswick (1997) and Quebec (1992, Quebec Sales Tax, which doesn’t fully harmonize the GST with provincial tax). In early 2009, the Ontario government announced its intention to implement an HST on July 1, 2010.
Provincial Update…
Vancouver, BC – The British Columbia Real Estate Association (BCREA) reports that Multiple Listing Service® (MLS®) residential sales in the province climbed 132 per cent to 5,703 units in December compared to the same month last year. More homes were sold last month than in any December on record except 1989 when 6,014 units were sold.
“2009 came in like a lamb and went out like a lion,” said Cameron Muir, BCREA Chief Economist. “The year began with home sales trending at a 25-year low and ended at a 20-year high. Low mortgage interest rates, pent-up demand and improving economic conditions were key drivers of consumer demand.”
A total of 85,028 residential units were sold through the MLS® in 2009, up 23 per cent from 68,923 units in 2008. The residential sales dollar volume increased 26 per cent to $39.6 billion last year, while the average MLS® residential price increased 2 per cent to $465,725.
“Considerable momentum in the housing market is expected to carry through the first quarter of 2010, before home sales begin to moderate as a result of eroding affordability and less pent-up demand,” added Muir.
For the complete news release, including detailed statistics, follow this link: www.bcrea.bc.ca/news_room/2009-12.pdf
The good news
Home buyers of new detached, attached and condominium apartment may be eligible for a New Housing Rebate if you buy, as your primary residence a:
* new home together with land
* new home together with leased land
* new mobile home or floating home
* home you buy through shares in a housing cooperative
* home constructed or substantially renovated (more than 90 per cent) by the owner who is the owner-builder
The maximum home price had been $400,000 to be eligible. In October 2009, the Real Estate Board asked the government to raise this amount to $700,000.
We heard the concerns from consumers and industry about how the HST might affect home buyers.
- Hon. Colin Hansen, Minister of Finance
The government compromised and has raised the threshold to $525,000 for a maximum rebate of $26,250. Homes costing more than $525,000 will also be eligible for a flat rebate of $26,250.
“We heard the concerns from consumers and industry about how the HST might affect home buyers, and this increase will move the threshold to above the average new home price in the province” said the Hon. Colin Hansen, Minister of Finance.
For information on how the HST will be applied to presales, vacant land and investment residential rental property, check back here.
The BC Harmonized Sales Tax in a Nutshell – A Quick Overview of the B.C. HST 12% Tax and How It Influences New Home Buyers of Real Estate
The Harmonized Sales Tax (also known as the new BC HST) is 12% tax applicable to most goods and services, including new homes, real estate, and property.
The new B.C. HST 12% Tax is the combination of the Federal Goods and Services Tax (5% GST) and the Provincial Sales Tax (7% PST).
Implementation of the BC Harmonized Sales Tax will take place on July 1, 2010.
The BC HST is NOT a 12% real estate tax, but a provincial harmonized tax on most goods, services and consumer products including new homes.
Currently, new BC and Vancouver homes are subject to 5% GST (federal tax) in which first time homebuyers or investors can receive GST rebates. This 5% GST will be replaced with the higher 12% B.C. Harmonized Sales Tax (HST), a 7% difference in taxes on the total purchase price of a new British Columbia home or property.
The B.C. HST program will give partial rebates for new BC homes priced up to $400,000. The government will give these homebuyers a partial five per cent BC HST rebate on the provincial tax side which makes any new B.C. home or Vancouver property $400,000 or less no more expensive than it is today.
Homebuyers looking to buy new Vancouver property over $400,000 will receive a maximum BC HST rebate of $20,000, but will see the purchase price above that level subject to the extra five per cent tax rate system.
The British Columbia Harmonized Sales Tax of 12% HST is also applicable to any costs and fees associated with your property/home purchase including legal/notary fees, commissions and other closing costs.
The BC HST transition rules are unclear at this time. It is unknown whether new Vancouver home sales contracts written before July 1, 2010 but completed after the harmonized sales tax HST launch date will be subject to the current 5% GST only or the entire 12% HST new tax.
The cost of new home ownership will increase significantly in British Columbia due to the new BC HST tax of 12%. Not only will your new home or real estate cost more up front, but the 12% HST harmonized sales tax is also applicable to such things like strata fees, residential heating fuel, commercial rents, smoke detectors, fire extinguishers, repairs, cable TV, internet, electricity, gas, renovations, painting and other professional services.
Some BC Real Estate HST Numbers and How It Affects You
Scenario 1: Based on a purchase price of $600,000 for a new BC or Vancouver home, the homebuyer would pay a total of $72,000 in BC HST taxes (12% on $600,000). With the homebuyer HST rebate for purchases above $600,000, the homebuyer would receive the $20,000, thus reducing their purchase cost to $52,000 in taxes for a total of $652,000. Currently, the 5% GST applicable to the same home would cost only $30,000 (a difference of $22,000). *This does not include the HST applicable to closing fees.
Scenario 2: If a BC homebuyer wanted to purchase a new Vancouver home costing $800,000, the total 12% HST hit would be $96,000. The partial HST rebate of $20,000 (maximum allowed) will reduce this to $76,000, making the final purchase price at $876,000 plus property transfer taxes and other closing costs. Before July 1, 2010, a new home would be subject to only 5% GST which is $40,000 on a $800,000 property. With the new BC harmonized sales tax, a BC homebuyer would pay $36,000 more for the same home after implementation of the HST tax. *This also does not include the HST applicable to closing costs.
Dear Members:
As you know, we have been addressing the impact of the proposed HST on new housing – for sale and rental. We have heard loud and clear your concerns and opposition to the new system and have learned that the vast majority of new family housing in the growth areas of the province (Lower Mainland, Greater Victoria, Greater Kelowna regions) will be priced over the $400,000 threshold that has been proposed.
Over the past couple of weeks, we have undertaken an analysis of the impact on a variety of family housing forms (2 plus bdrms) and have also analyzed the impact on new versus resale housing. For purposes of easy comparison, we have chosen to use the mean (average) price of a variety of new housing forms and compared this to resale product at the same price. However, it should be noted that the mean price of a new family condo in Vancouver, for instance, is $801,400 while the mean price of a resale family condo is $574,400. The mean price of a new single family Coquitlam home is $744,800 but the mean price for resale is $459,679. The mean price for a new Burnaby townhouse is $472,900 but the mean price for resale is $427,900.
New housing costs include a variety of newer regulatory requirements and extractions as well as higher land and construction costs that may not have been applied when the resale housing was originally built.
In addition to the increase in regulatory costs, new housing is at a disadvantage when it comes to taxation. GST only applies to new housing. Now, with the introduction of the HST, the disparity between new and resale housing is magnified. For example:
· When comparing a new versus resale townhouse in Burnaby, both valued at $472,900 (average price for new townhouse in Burnaby), the new townhouse will pay $32,983.70 more in taxes.
· When comparing a new versus resale single family home in Coquitlam both valued at $744,800 (average price for new home in Coquitlam), the new home will pay $52,300 more in taxes.
· When comparing a new versus resale family condo in Vancouver both valued at $801,400 (average price for new family condo in Vancouver), the new condo will pay $60,890 more in taxes.
When you account for the increased financing costs at 6% over 20 years required to cover these taxes, the disparity is very dramatic – the townhouse taxes now cost $43,170.80, the single family home taxes now cost $80,519.80 and the condo taxes now cost $93,745.70.
Given this, our members believe they will face waning consumer demand for new product which may lead to an equally troublesome concern that more jobs will be lost until such time as the economy recovers and there is significant increased pressure for more housing.
We are currently working through the implications on rental housing but early comment from our members who build rental housing is that the HST will be a backward step at a time when our members were considering building rental.
We will be meeting with government officials and the Premier over the next week and we would like your input on our key recommendations which include:
1. Increase the threshold from $400,000 to a much higher number – at least $600,000 or - the average price of family housing in growth areas of BC
2. Index the threshold so it increases with average price of family housing in growth areas of BC
3. Increase the current flat $20,000 rebate to a much higher number and index as above, or - remove the cap and make rebate 5% of the tax collectible (this, combined with the estimated 2% input credits should bring us closer to tax neutrality).
4. Grandparent all pre-sales and projects (including phased development agreements) in the development process prior to July 1, 2010.
5. For projects complete but not pre-sold or those that need to be self-assessed for rental purposes, allow offset of any PST obligation that occurs prior to July 1, 2010, irrespective of the date of sale or self assessment of units.
6. To mitigate the growing disparity between new versus resale housing, eliminate the Property Transfer Tax on vacant land and new housing.
