HST Is Here, What Does This Do To Residential Construction?

I have to say it is a sigh of relief that the day is finally here and that the reality has set in. I t has been a rather long and dragged out affair for all of us builders and trades people that are in the industry. It seems like we just get use to a system and our government goes and throws another change our way just to keep life interesting. Whether you agree with it or not, this is how it affects our industry in a nutshell.

Rebate of up to $24,000 on new homes up to $400,000

New homes sales will be subject to HST, but buyers of homes priced more than $400,000 will be eligible for a rebate of $24,000

Sales of existing resale homes will not be generally subject to HST

Homebuyers will pay HST on any professional service in a real estate transaction

Home sellers use to pay 5% GST on realtor commissions, home inspections, lawyers fees and appraisal. Now under HST it is 13%

Renovations and upgrades to your home will now cost 13% on material and labour

If you are building a house and it is under the $400,000 mark you will see a very minimal change in the price than it was before. However if you are renovating you will see an increase simply because our government has no permanent rebate in place for this section of our business, which probably will add fuel to the fire to the underground economy. I think we have to remember that we need to add that fuel to the engine that drives our economy instead.