Real estate experts say the harmonized sales tax in B.C. will have disastrous consequences for homebuyers.

Once the HST takes effect in July 2010, many real-estate transactions currently not charged under the provincial sales tax will now be subject to the additional tax, including home inspections, commissions and other services.

Paul Penner of the Fraser Valley Real Estate Board says the industry was "completely blindsided" by the HST changes.

He says anyone buying a new home over $400,000 will feel the blow of the additional tax.

"Some of the people that can barely afford to buy today will end up dropping out of the market," he said.

For example, the average cost of a detached house in the Fraser valley is $505,000. With the HST, homeowners will be hit with another $15,000 in taxes after a government promised rebate for a portion of the tax.

On an $800,000 home, you could pay up to $28,000 more in taxes.

Peter Simpson of the Greater Vancouver Homebuilders says the HST could be crippling.

"This is the worst thing that can happen at this time. We have enough challenges as it is with the economy," he said.

Simpson predicts the HST means the price of homes is going to jump noticeably.

"We have very high price houses in the Lower Mainland so we're going to see those prices rise dramatically with the new tax and it will all be borne by the home buyer," he said.

Homeowner Shauna Nicholson is buying a previously owned home, but she'd still be hit by the HST. Here's what she'll pay in additional costs:

  • $840 on real estate commission
  • $52.50 for cleaning services
  • $31.50 for the building inspector and storage unit
  • $14 more in taxes for truck rental

Nicholson says the additional costs, in her case almost $1,000, may make people think twice about moving anytime soon.

"It just seems insane to me. Just a crazy amount of money to move," Nicholson said.

"Make a lot of people stay where they are I'm sure."

A recent Angus Reid poll found 75 per cent of respondents disagree with the implementation of the HST, with disapproval particularly high in Metro Vancouver, Vancouver Island and the Southern Interior.

With a report from CTV British Columbia's Michele Brunoro