Homebuilders, sellers welcome HST transition rules 

Higher threshold, new rules expected to boost housing industry

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Whistler homebuilders are welcoming the new HST transition rules announced by the province this week.

"I think that one of the most valuable parts of the adjustment, or transition rules, is the extension of the (HST) credit to second homeowners, said Bob Deeks of Whistler's RDC Fine Homes.

"Previously with the lower threshold that credit was not available.

"Even though the credit on vacant land purchases is small, it wasn't available to someone looking to buy or build a home here as a second home. And the increase of the threshold, considering the value of properties, was meaningful."

Deeks said things are picking up and that he could be signing two new home building contracts for next summer — something that may not have happened without the transition rules.

"It's the uncertainty the tax created," he said. "It started with the announcement of the referendum, and then the results of the referendum created another time lag, a chance for people to sit on their hands and wait until 2013. The announcement of the transition rules ended that uncertainty."

Deeks said the new rules are the icing on the cake in a way, as Whistler has never been as attractive to build, buy or renovate.

"If I had a message it would be that now is the time to take advantage of low interest rates and overcapacity in the industry. People are keen to work and providing good pricing," he said. "And real estate in Whistler is at an all-time low... one client bought a lot in Bayshores for $350,000."

Deeks said the recent trend is towards value, even for high-end homes.

"Real estate has become like baseball, where people are obsessed with statistics. Twenty years ago nobody considered the cost per square foot like they do now, and now we see people making those comparisons on paper without looking at any features. They look at the street address, the square footage, the assessed value of the home, and it's become a pure numbers game. Some of the emotion has been taken away from buying real estate."

The addition of HST to new home sales was one of the most contentious issues when the province brought in the HST. It added five per cent tax to every purchase. With the average home price in Vancouver hovering around $800,000 it was a sizable hit.

Prospective homebuyers had no idea what would replace the HST, and if it was better to wait until the tax was removed before buying or building a home. The GST system will come back into force in April 2013.

The main concession by the province in the transition rules was the decision to raise the HST rebate threshold to $850,000 from $525,000, a level that captures roughly 90 per cent of new homes in the province. For an $850,000 home the rebate is $42,500.

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