BC essentially has the same HST system, no?

in theory, builders credit you and then claim the credit for themselves. whether that is indeed the case is up for debate...but I fail to see how the HST presents any additional mechanism to 'profit' from the buyer.

if the market is such that builders can 'charge whatever they want', then any 'scam revenue' from the HST would be moot.

otherwise...if it's a buyer's market and builders are competing for business, then there would be little benefit to holding back any buyer credits/incentives, no?

there are some who suggest that the overall implementation of the HST will result in it being tax-neutral for consumers. I'm not in a position to really comment either way...though I think it's fair to say that clearer information should be available to us.

quote:

Originally posted by MarkT in theory, builders credit you and then claim the credit for themselves. whether that is indeed the case is up for debate...but I fail to see how the HST presents any additional mechanism to 'profit' from the buyer.

I can't speak to what the actual net profit is with respect to their costs, but they are certainly bringing in more revenue.

- The cost to build is exactly the same (they may end up paying more tax on materials and so on, but that's all written off/rebated);

- Your cost to buy goes up;

- Ordinarily you'd be eligible to get at least some of that extra money back (HST rebate) but instead you sign it over to the builder.

Bottom line, you're getting charged a certain amount of money as "tax" that never gets remitted to the government, it goes straight into the builder's pockets. There's not even a time lag for them, because you have to reconcile all of these rebates at closing time, long before the rebates are actually sent out.

It's not any different in concept from what they already do with GST, it's just magnifying the damage.

And it's not a "theory" Mark - I went through this process, signed the forms, had to turn over the rebate. It's unfortunately not a buyer's market in this city and probably never will be due to our messed-up interventionist housing system and never-ending stream of new immigrants.

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I signed the same shit when I got our present place...

Sign over the rebate or no sale....

End of story...

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quote:

Originally posted by chinamon chinamon is INCH MOAN. LOL so fitting.

my overall point is that just because you've signed over the rebate doesn't mean that you didn't benefit from it in the pricing...and since you can't speak to the end profit for the builder by being able to compare pre-HST and post-HST scenarios on the same house, it's not really possible to say that the practice is a "scam".

a couple of examples are here:

http://www.stikeman.com/cps/rde/xchg/se-en/hs.xsl/12433.htm

so the cost to build is now a little bit lower. in theory, those savings are passed along to buyers in the pricing (there remains plenty of competition in the new construction market, after all, unless you're suggesting collusion on the part of all builders).

if it's such a seller's market (and that is not always the case), the builder wouldn't need to use an HST rebate as a profit mechanism...they could just charge a higher price in the first place.

there is an assumption that the lower costs to the builder are passed along to buyers. that is up for debate...but calling assigned rebates a 'scam' is presumptuous, at best.

Last edited by MarkT on Apr-02-2010 at 22:24

quote:

Originally posted by MarkT so the cost to build is now a little bit lower. in theory, those savings are passed along to buyers in the pricing

In theory, there's no difference between theory and practice. In practice, there is.

I'm not suggesting active collusion, but tacit collusion, absolutely. "Everyone else is doing it" (AKA "we're no worse than our competitors") is one of the most common excuses in business for poor service and misleading marketing.

quote:

if it's such a seller's market (and that is not always the case), the builder wouldn't need to use an HST rebate as a profit mechanism...they could just charge a higher price in the first place.

Yes, and wireless carriers (who are essentially one big monopoly) could stop charging system access fees and all that other BS that they use to hide their true cost. A seller's market doesn't mean that buyers will pay anything - they always have the choice to buy nothing instead. Hence these lame tricks to post an artificially low sale price.

As a buyer I'd much rather see transparency - have the real cost reported up front and deal with the rebates myself - than deal with their circuitous accounting. It's a bit like buying a new car and negotiating a lease price instead of a sticker price - you really have no clue what the price is made up of (and therefore can't ascertain whether or not its a good value) until you actually see the contract.

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My party schedule:
2009-02-21 - DJ Attention @ I'm So Popular
2009-06-18 - DJ Annoying @ People Need To Know Where I'll Be
2012-11-32 - DJ Insufferable ɸ Or At Least the Stalkers I Complain About
2048-06-66 - Spastic & Whocares ¶ Although I'm Actually Flattered
9999-45-81 - Tweaker Gimp ☼ I Probably Won't Even Go To This But I Have To Make Sure I Fill Up All The Available Space Here