Home renovators shut out of HST relief
New transitional rules for the harmonized sales tax have come as a relief to B.C. home builders and potential buyers, but have left struggling home renovators in the lurch.
On Friday, Finance Minister Kevin Falcon announced that the province will raise the HST rebate threshold for new home buyers to $850,000, up from the current $525,000, on April 1 of this year.
New homebuyers face extra taxes under the HST and there have been widespread fears people will put off buying and building new homes until the tax is repealed next year.
But noticeably absent in today's announcement was any relief for people who work in the home renovation business, who were hoping for some help for their hurting industry. Many consumers have been delaying major jobs to avoid paying the extra taxes under the HST.
Bryan Hayes at West Coast Windows says his business has dropped 35-per-cent since the since the introduction of the HST. Despite offering promotions promising to pay the HST on renovation projects, he has had to lay off 15 staffers at his Delta manufacturing facility.
He said the HST relief shutout is highly disappointing.
"The impact on business has been staggering, so no news is more staggering news to us, and I guess we sit and wait and hope that some time in the near future we get some turnaround with some news that will benefit the company long term," Hayes told CTV's Steele on Your Side.
But Falcon insists the difficulties in the home renovation industry are just temporary, and will ease next year.
"As of April 1st, 2013, we'll be back in PST world and obviously that will give them the break equivalent that they had before," he told reporters.
Falcon said the industry has to "wait and see" if they'll get any early break from the extra tax burden that's hurting business.
"Obviously next week I have a budget and you can wait and see if I can deal with those kind of issues," he said.
That news doesn't bode well with Hayes, who says changes need to come quickly – to keep his business going.
"If we weren't swallowing HST we'd be losing even more business and more positions. It's been, for a small company, it's been a struggle just to keep up with all the changes that the taxes have implanted to us," he said.
Peter Simpson of the Greater Vancouver Home Builders' Association to see a tax credit put in place in B.C. to make people feel more comfortable doing home renovations before the end of the HST.
Simpson said home renovation, repair and improvement generates more than $7.6 billion in B.C. alone, but much of that is done in cash deals under the table so homeowners avoid paying the extra tax.
"So there has to be some sort of tax relief to mitigate the effect of the HST and to make people reject working in the underground tax economy," he said.
Forty per cent of British Columbians have put off making a major purchase, such as a new car, television, work with a contractor or a holiday, because they don't want to be subject to the additional tax, according to an Angus Reid Public Opinion poll conducted for CTV's Steele on Your Side.
Sixty-six per cent of respondents reported being disappointed by the BC Liberals' plan to phase out the HST by March 2013.