New houses in Chilliwack are more affordable due to rebates under the harmonized sales tax, claims Chilliwack realtor Jake Siemens.
“In the Chilliwack area, the HST has lowered the cost of the average new home we are selling at Jinkerson Vistas by between $900 and $2,200,” he said in a news release issued by the B.C. Liberal government caucus.
Siemens stood by his comments in a telephone interview with The Progress Wednesday.
But other realtors aren’t so sure, saying the HST and its impact on real estate is “so confusing,” as Mark Andersen, president of the Chilliwack and District Real Estate Board, put it, that Siemens’ calculations have been sent on to the provincial real estate board.
But Chilliwack realtor Michael Henshall is already firmly in the anti-HST camp.
“I would say, if there is a decrease in price, it’s due to the economy as a whole slowing down,” he said, as new home buyers hold off purchases, the inventory of unsold houses grows, which causes prices to fall.
“Vote to get rid of the HST,” he advised, quoting Winston Churchill’s comment that “for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself.”
According to the Vancouver Real Estate Board’s HST site, buyers of homes priced under $525,000 won’t have to pay the HST due to rebates.
But it goes on to say that the HST “penalizes those homebuyers who have saved vigorously to purchase a new home in B.C. and who can afford something more substantial and bigger for their families.”
In Chilliwack, where the average house price starts at about $445,000, Siemens said the “HST rebates for this price range would reduce the final sale price by nearly $1,300 compared to the PST/GST.”
However, Henshall pointed out that buyers still face extra costs as the HST is applied to previously untaxed house inspections, conveyancing and realtors’ fees.
In the government news release, Chilliwack-Hope MLA Barry Penner said economists had predicted new house prices would drop with the HST.
“By removing the embedded PST that used to apply to every can of paint, all the nails and every piece of lumber that goes into a new house, the HST has resulted in the final price being lower for these new homes,” he said.
Said Chilliwack MLA John Les in the release: “This is great news for home buyers. Not only does the HST lower the costs for builders, but it’s now easier for first-time home owners to enter the housing market.”
NDP activist Gwen O’Mahony, who has run in both federal and provincial elections, said the news release “seems to be a real desperate effort to sell this tax to Chilliwack.”
“I sent it on to our NDP team because of the way it was framed, like it was a unique situation only in Chilliwack,” she said.
Former B.C. Premier Bill Vander Zalm said in an email that the Fight HST organization get “more complaints about the negative effects of the HST from home builders and realtors than from any other particular group.”
“I don’t know what is happening in Chilliwack,” he said. “We are taking the Liberal government to task with the ombudspersons office over false, misleading and lying advertising, maybe this government release should be thrown into the mix.”