The GST rebate will provide a rebate for HST for poor people, which means they’ll end up paying zero HST effectively. The one exception would of course be people who are so poorly resourced that they can’t file a tax return. Efforts to make sure these people file and get their credit would be a sound thing for any progressive elements to be pushing for.

The gripes from new home owners about the HST are pure whinging. The housing market gets more government pork than any other sector (think about the enormous amount of government backed insurance that is provided by CMHC, without which home prices wouldn’t be nearly as high). I for one am glad that HST is going to start recouping some of that ridiculous largess from a sector that is already far too distorted by government incentives.

I also think that food should be HST taxable. Before the GST (and the GST exemption for groceries), restaurants and grocery stores shared about 50% of the food market each. Now restaurants have only 39% – probably because people have to pay a tax to eat in a restaurant. I don’t understand why there is this distortion. If HST is charged at restaurants, then it should be charged at the grocery store as well. The extra tax collected on groceries could fund food banks and other mechanisms to help the poor feed themselves, while restaurants would be back on fair ground providing the awesome economically sound service of providing prepared meals in an efficient way to a hungry public.

Also, given the underhanded way in which the tax was presented to us — with no consultation, no warning, no opportunity for the voting public to weigh in — it almost doesn’t matter to me how it affects my bottom line. I actually don’t believe it will be good for consumers at the end of the day — if it would obviously result in a tax cut for the average joe, then presumably the government would have been willing to present it transparently and to make it an election issue. That they didn’t makes me suspicious of everything else they have said about it, other than the announcement that it looms!
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In any case, I didn’t want to comment on your numbers so much as on the impact of the tax. I agree with you that the implementation of the HST on new construction will affect the resale market. I expect that we will see resale prices rise 7% in order to balance out with the costs of new construction once the HST is in place.

We are already paying a hefty provincial tax on purchasing property in British Columbia (the PTT which is 1% on the first $200,000 and 2% on the balance). Adding the PST to this tax (albeit only for new construction) only exacerbates the affordability issue in BC (and particularly in Vancouver).
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So I calculated HST for the full price of the house, minus the $20k rebate.

I’m no math whiz, but I’d argue I’ve interpreted the equation more correctly than the Globe did. Though it’d be nice if someone would prove me wrong.

I appreciate your math though.
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It’s also worth mentioning that there used to be a GST exemption for first-time home buyers (which I know you’re not, but I just mention it). I wonder if that will go away under the HST?
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