BC HST Rate Cut is Win-Win for Everyone
HST in BC is on the verge of elimination. News is Ottawa is already in talks with Victoria how to fold down HST and get the $1.7 billion back. That was the incentive Ottawa paid to Victoria for introducing HST.
Undoubtedly HST is good for both Businesses and Consumers. Businesses are immediately saving 7% PST with the introduction of HST. Unfortunately consumers have not been able to get the benefits of this savings due to the reluctance of many business owners to pass on the savings. The pricing change of products and services or the job creation due to HST has not taken effect as promised by the finance minister. Sure, it created a lot of anger among the consumers.
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HST and Income Tax Causing Fall of Empires
History repeating again. Mighty rulers of empires have fallen many times over this.
Your subjects do not like to be taxed.
Yesterday, it was Obama, got a dose or reality. America’s infatuation over change has faced the new reality, that nothing changed for over two years.
Today it’s British Columbia. The Premier could not stop the tide of discontent of Province’s people by giving a soothing lecture last week and cutting income tax.
In BC, people do not like HST to being with, and more than that, how it was implemented and imposed on BC.
Simply put, it has blind sided every common people in BC.
There were no public input, no advance sign and no discussion about the benefits of HST on overall economy.
The Liberals have failed massively to get any support for HST.
The Premier in his resignation speech mentioned about personal attack, and the cause of stepping down as BC Premier.
Well, it was his personal decision to implement the HST as the way it got implemented.
He must take responsibility.
Cheers for the people of British Columbia. More power to you.
Home Buyers Are Ignorant about HST in British Columbia and Ontario
I wrote about this myths about HST is causing a havoc in real estate market where HST was introduced in July 2009.
Home buyers are ignorant about HST and also real estate experts have failed to send the message about the net effect of HST to the prospective home buyers.
A recent study confirms my conclusion about HST and Real Estate market.
BC Province HST Real Estate: HST investment Property Tax Real Estate Tax
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Myths about HST and Vancouver Real Estate Market
For Sale
Ignorance about HST is causing a chaos on Vancouver real estate market. Every prospective home buyer, real estate agent, mortgage broker have their very own interpretation of HST on real estate transaction.
It’s a myth that housing market is down due to HST. HST could be a great opportunity for everyone involved in the housing market to bring in more sales. HST should not be blamed for a downtrend in housing market.
With the implementation of HST in BC, a new housing rebate program was introduced, to offset the additional HST burden on home purchase. Its an exciting program and it should attract more home buyers in the market.
A prospective new home buyer can purchase a brand new home with no HST, by using BC new housing rebate program. Most of the first time home buyers trying to get their first primary residence are qualified for this program. Beside that, homes for resale are not subject to any HST.
As per the BC new housing rebate program, after implementation of HST, if someone buy a new house valued at $525,000, using the program they do not have to pay any HST. The housing rebate of $26,250 caps off at $525,000. If the property cost more than $525,000, the buyer will pay HST on the additional amount above $525,000.
Also, one very important thing to remember or mention to the prospective home buyer that even Real Estate HST rate is 12%, BC portion of HST rebate of 7%, brings down the effective rate of HST to 5%.
Since HST is a tax on consumption, the higher the property value will be, the more your HST the buyer will pay.
For a property costing $525,000 there is no difference in cost for before HST purchase or after HST purchase.
But for a property costing $1 million after HST purchase puts an additional burden of $20,000, than it would have cost before HST, or 2% of additional tax due to HST.
So, for majority of BC new home buyers, HST does not have any impact at all, with BC new housing rebate program.
For a million dollar home the net impact of HST with BC new housing program is only 2%. And it starts to go up, with the increased purchase price of the housing.
It is well known that Vancouver home prices are inflated and if someone knowingly investing in that market, a 2% additional tax on a million dollar home purchase, should not make a significant difference in their purchasing decision. For high end home buyers its a choice between paying 2% HST now, or wait and pay 5% inflated price for the property few months later on top of more than 2% HST.
How to Save HST and Benefit both Consumers and Businesses
British Columbia HST referendum will take place as specified by the BC Legislation on Saturday, September 24, 2011. Until then, consumers will pay 12% HST and businesses will be able to claim 12% HST input tax credit.
During the remaining 11 months, before the referendum, BC businesses must convince consumers about the benefits of HST to keep it from rescinding it. The benefit of 7% additional input tax credit with HST is beneficial for all businesses.
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