Welcome relief may be the best way to describe the reactions of many to two significant announcements for the new housing market made by Minister of Finance Kevin Falcon on February 17, 2012. BCREA thanks the BC government for these measures, which respond directly to concerns expressed for the past two years.
Specifically, effective April 1, 2012, the government will substantially increase the BC Harmonized Sales Tax rebate threshold for new homes purchased as primary residences to $850,000 (from $525,000), and create a grant of up to $42,500 for newly-constructed secondary homes where no grant has existed before. The temporary BC First-Time New Home Buyers’ bonus announced in the budget on February 21 will also provide additional support for buyers who need it the most.
Overall, the benefit to buyers of new homes and people who work in the real estate sector is obvious. Perhaps less apparent is the fact that real estate sales generate significant additional spending and taxes, driving activity throughout the provincial economy.
According to a study conducted by Altus Group Economic Consulting, each BC home sold on the Multiple Listing Service® (MLS®) in 2009 generated nearly $60,000 in expenditures—well above the national figure. In 2011, nearly 78,000 homes were sold on the MLS® in BC, resulting in nearly $4.7 billion in additional economic activity.
Now that the rules for the transition back to a Provincial Sales Tax/Goods and Services Tax world have been published, and the transition date of April 1, 2013 set, buyers of new homes, REALTORS®, builders and developers around BC can get down to business and move forward.
BCREA looks forward to the release of additional information about the transition, and plans to make resources available through its website at www.bcrea.bc.ca.