Excerpts from the FVREB President's Column. What difference does that make? To give you an idea, of the 137 new homes (detached and attached) that sold on Fraser Valley’s MLS® in April (with an age of zero), 22 properties sold for between $400,000 and $525,000 – the average price being $475,658.
The BC government has raised the Provincial HST new housing rebate threshold to $525,000 from $400,000 AND increase the maximum rebate to $26,250 from $20,000.
What difference does that make? To give you an idea, of the 137 new homes (detached and attached) that sold on Fraser Valley’s MLS® in April (with an age of zero), 22 properties sold for between $400,000 and $525,000 – the average price being $475,658.If that $475,658 home was new and sold after July 1, under the originally proposed HST regime, families would have paid approximately $3,300 more, but due to the revised threshold and maximum rebate levels REALTORS® lobbied for, they will be saving it instead. Though we didn’t get everything we asked for from the government, saving our clients the value of a couple of mortgage payments was a good first step.
I feel the second key message is almost more important than the first one. Most buyers across the Lower Mainland may not have realized yet that the Fraser Valley will offer consumers noticeable savings when the HST comes into effect because about half of our new homes fall under the BC new housing rebate threshold.
Let me explain. Virtually all new townhomes and apartments in the Fraser Valley sell for less than $525,000. Therefore, the impact of the HST on these real estate transactions will be minimal. However, keep in mind the full 12% HST (as opposed to the current 5% GST) will apply to fees for professional services related to sales of new or existing homes.
In terms of detached homes – most new homes in the Fraser Valley are selling for above the threshold of $525,000. Although, I was just looking at a lovely new detached home in Cloverdale for one of my clients: asking price $499,000 + GST.
Rest assured, homes like this are undoubtedly going to attract even more attention after July 1st and it’s up to our members to promote the fact that in the Fraser Valley many beautiful, new detached homes and an endless supply of new attached homes will be nearly HST-free.