Wanson Development is waging "hundreds of thousands of dollars" that B.C. voters will kill the controversial harmonized sales tax (HST) in a mail-in vote this coming June.
At the opening of its new Eight West condominium development in New Westminster last month, Wanson spokesman Bill Morrison said the company has refused to charge the HST on 160 condominiums. Morrison said the HST, which is charged on new homes but not on resale homes, is driving prices for resale homes higher than the cost of new housing.
"Can you imagine paying more for a seven-year-old car than a brand-new one?" asked Morrison. "At Eight West, we have one-bedroom suites from $168,800 and our homes are priced less than comparable seven-year-old resale product right across the street and throughout New Westminster. As a result, the decision to buy new or used is determined by the requirement to pay HST." He added that the HST has damaged one of B.C.'s largest economic drivers, the new-home industry, which affects everything from labour to lumber.
Other developers disagree. Speaking at the recent Vancouver Real Estate Forum, Ralph Archibald senior vice-president of Polygon Homes Ltd. said new-home buyers appear to have accepted the HST and that the affect of the tax on labour and building-material prices is starting to benefit developers.
"There is a lot of confusion about the HST," Archibald said. "First of all it is not 12 per cent on every new home."
Under the HST guidelines, buyers of new homes are eligible for a rebate of 71.43 per cent of the provincial portion of the HST paid on a new home, up to a maximum of $26,250. Homes above $525,000 receive a flat rebate of $26,250. The rebates do not apply, however, for investors buying a condominium, for instance, as a second residence.
On a $168,000 condominium bought by an owner-occupier, the HST would be $8,753. If bought as a second home, the HST would be $20,160.
"We are putting hundreds of thousands of dollars of our own money up as collateral because we believe the HST will be overturned," Morrison said.
Eight West is currently the largest residential land assembly in New Westminster, totalling more than 160 condominiums and townhomes located on Eighth Street. When fully built out, the value of the entire Eight West community is expected to be approximately $50 million.
from Western Investor, May 2011
