The fall in Canadian home sales in July was driven by declining sales in British Columbia and Ontario after the implementation of the harmonized sales tax (HST).
“Because of the hype that was going on, there was pent-up demand and people were rushing to buy homes before the deadline,” said M.J. Whitemarsh, chief executive officer of the Canadian Home Builders’ Association of British Columbia.
The B.C. and Ontario governments harmonized the provincial sales tax (PST) with the federal goods and services tax (GST) on July 1. The HST created a single combined sales tax rate of 12 per cent in B.C. and 13 per cent in Ontario.
The Canadian Real Estate Association reported that seasonally adjusted home sales through its MLS service across the country were down 6.8 per cent in July compared with June.
The report found that declines in British Columbia (14.1 per cent) and Ontario (8 per cent) accounted for 85 per cent of the change in national activity in July.