The B.C. government's planned 18-month transition process to replace the harmonized sales tax threatens the potential creation of 8,000 construction jobs and more than 2,000 residential housing units, says the Urban Development Institute.

UDI president Don Forsgren said thousands of residential building units are already on hold, with more expected, prompting the industry to lobby the Liberal government to implement a transition strategy to minimize the HST's impact on new home purchases.

The institute it represents more than 550 of British Columbia's residential, commercial, industrial and institutional developers who create $30 billion worth of economic activity and more than 250,000 indirect and direct jobs annually, Forsgren said.

"We're talking about 8,000 potential job losses," said Forsgren. "It's just very hard for projects to go forward at this point when people don't know what the rules are going to be surrounding the tax. It's just another reason for people to say now is not the right time to buy."

Forsgren said he understands the government's reasoning behind taking 18 month's to ensure a seamless transition from the 12-per-cent HST back to the former five-per-cent federal Goods and Services Tax and the former seven-per-cent provincial sales tax.

But, if HST changes are not made soon, many developers and potential new home buyers will likely wait to save money.

British Columbians voted to get rid of the tax in a referendum earlier this year.

Under the HST, buyers who bought new homes over $525,000 received a $26,500 exemption, but paid the 12-per-cent HST. New homes under $525,000 were not charged HST.

Under the former and incoming, GST/PST system, new home buyers will only pay the five per cent GST.

Forsgren said the UDI is lobbying the provincial government to grant the building industry three HST changes to ease the transition back to the old tax system.

He said the industry wants the province to exempt the seven-per-cent provincial sales tax from pre-sale home purchases that close in March 2013.

The industry also wants the government to significantly raise the $525,000 HST threshold on new homes and consider rebate cheques to new home buyers who buy houses above $525,000, Forsgren said.

The UDI does not have target numbers for the threshold changes or rebate amounts, he said.

Forsgren said the current situation with the HST being replaced by the former GST/PST system creates uncertainty for consumers and builders, who need to know the price of the home.

"You just have to put yourself in the consumer's shoes of walking in to buy a $700,000 home for your family and you ask a simple question like, 'What's my bottomline? What am I going to have to pay?"'

Forsgren said the potential deal starts getting shaky when the buyer considers buying today or waiting until March 2013 to save the tax bill.

"You're probably not going to delay going out for dinner with your wife this weekend and wait until March 2013 to do it, but you might if you're buying an $800,000 house," he said.

Finance Minister Kevin Falcon was not immediately available for comment, but officials in his ministry acknowledged they are aware of the concerns of the building industry.

Ministry officials did not comment on possible HST changes before March 2013, but provided statistics that indicate declines nationwide in the residential building sector.

Finance Ministry numbers indicate B.C. housing starts this year up to September are down 2.9 per cent compared to the same period in 2010. The national housing start average is down 2.3 per cent, but Alberta, Manitoba, New Brunswick and Newfoundland are all down by more than 10 per cent.

In Ontario, housing starts rose 9.6 per cent, and they're up 25 per cent in Saskatchewan.

The Finance Ministry statistics show a job increase in the B.C. construction sector despite the concerns of job losses by the residential builders.

In June 2010, there were about 190,000 people employed in construction, while in September 2011, Stats Can reported 214,000 people employed in the B.C. construction sector.

B.C. Chamber of Commerce president John Winter said his organization is preparing a briefing document to give to the government outlining concerns with the HST.

"We're gathering information from our members," he said. "It's a mixed bag of stuff that depends on what sectors of the economy and communities you're talking about."

Winter said the concerns generally surrounding the timeline for the return to the old GST/PST tax system and some forms of monetary breaks for business.

"It's hard for us to be terribly definitive in this case, because of the variety of businesses we represent," Winter said.

John Allan, Council of Forest Industries spokesman, said the forest industry was a major backer of the HST and was disappointed with the August provincewide referendum result that turfed the tax, but the industry is currently concerned with greater economic issues than the HST.

Allan said some forest industry employers may be taking advantage of the HST's 12-per-cent tax input system to buy new equipment, but outside forces play a larger role on the provincial economy than the HST.

"Currency swings, commodity price swings, those are the big drivers for the B.C. economy," he said.