The Provincial Sales Tax (PST) back in effect now for nearly a month, has decreased the taxes on real estate and bicycles but bumped up tax on liquor.
With the implementation of the Harmonized Sales Tax (HST) in 2010, new homes in B.C. were subject to a seven per cent rate hike as the HST was applicable to the sale of new homes.
Now that B.C. is back to the two-tiered tax system, Goods and Services (GST) (five per cent) and PST (seven per cent), British Columbians buying new homes will be spared from paying the PST.
However, Pete Vanjoff, a realtor with Grand Forks Realty, said that doesn’t really make an impact in Grand Forks.
Vanjoff said that Grand Forks hardly has any new houses being built and sold.
“So the only difference is that people will now be saving seven per cent tax on a new home, but most of the houses in Grand Forks are used or pre-owned homes,” he said.
Where people will see a savings, in terms of pre-owned homes, will be in regards to the realtor’s commission, which will be an average of nearly $800 dollars savings, according to Vanjoff.
“The seven per cent (PST) is saved on the commission of a sale,” said the Grand Forks realtor.
Sharon Marshall, realtor with Border Country Realty, believes that the tax savings on commissions could help the real estate market.
“The real estate market has been improving, the tax portion that people are having to pay will change and it probably won’t hurt,” she said.
Brian Fletcher, owner of Chain Reaction Ride & Slide, said the re-implementation of the PST has been good for the bike business, as bicycle purchases are now only subject to the five per cent GST.
“In this particular case, there have been bigger bike sales,” said Fletcher. “More expensive bikes have been selling, as opposed to just the $500 bikes that are quite commonly sold here.”
If a cyclist were to buy $1,000 bike, they would save $70 dollars.
“I had a guy last week that bought a $3,400 bike and the tax savings alone on that were $238. That’s huge,” he said.
The return of the PST has meant that the tax on liquor has actually increased by three per cent from the 12 per cent HST, so people are now paying 15 per cent for alcohol.
Liquor is now subject to the five per cent GST and the return of the 10 per cent provincial liquor sales tax.
“To minimize the impact on shelf prices, the Liquor Distribution Branch reverted to lower mark-up rates on liquor that were in place June 30, 2010 (prior to HST implementation),” said Vince Cournoyer, a communications manager with the BC Liquor Distribution Branch, in an email to the Gazette.