According to realtors in Fredericton, the provincial increase in HST lead many New Brunsickers to quickly close deals on their homes before the July 1, 2016 increase, but for people who haven’t sold their homes yet — there’s no need to panic. At least for people buying re-sale.
Exit Realty real estate sales person Samantha Bell said the HST is more than it was, but it’s not a huge increase in the grand scheme of what people are paying. She says it’s mainly new construction that will be affected, not people buying re-sale.
“For our developers it’s a worry because their prices are going to have to reflect this change, in what they’re paying in HST and for the buyer because they’re going to have to pay that increased amount if they do want to purchase a brand new home,” Bell said.
Bryan Mahoney and his partner are in the process of getting their house on the market, but the HST increase is causing them rethink what they want to buy.
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“Really right now we were really looking into the building side of things, but with the HST going up it kind of really affects the budgeting side, so it’s kind of something that we have to think about now,” Mahoney said.
Keller Williams Capital Realty owner and broker Austin Drisdelle said the increase will also make it more challenging for first-time buyers to get into their first home.
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Drisdelle said the market is up year over year, particularly in the month of June, and said it’s been even more so the case this year as people tried to close deals before HST rose.
“For first time home buyers, the extra two percent means that they’ve gotta find an extra two percent for closing costs, the extra two percent in maybe in the down payment, so there is a lot of variable involved. Not only is it two percent onto sale of the house, but it’s two percent on everything else,” Drisdelle said.
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Drisdelle told Global News the hike will also impact the cost of home inspections, water tests, legal fees, as well as any moving expenses.
“It just doesn’t impact the home ownership, it impacts all the affiliates that tie into buying and purchasing a home,” Drisdelle said.
For people looking at a $100,000 house, Drisdelle said with legal fees it could cost anywhere between an extra $200 to $600 dollars in additional expenses.
Drisdelle said despite the increase, people will always need housing.
Watch below: Smart Money series: First-time home buying dos and dont’s, plus other financial home buying tips
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