I am looking at buying a 2005 h2 and the car was lifted with tires that appear too small (33's) will the tire size affect the vehicle over time?

Have you checked the H2 forum to see what size H2 owners are running on their non stock lifted SUV's. Most car/truck forums have a wheel and tire fitment thread.

Also on a side note you could used the wheel and tire size issue as a bargining chip if you do decide to purchase the SUV in question.

I own a 2008 h2 and I'm running 37x 12.50 with no lift . I can't imagine having a lift and running anything smaller it just wouldn't look right. But remember a lift and big tires is going to affect your gas mileage and the fact that your going to need a step ladder just to check your oil. One other thing is if you have big tires and a regular spare tire and you get a flat in the front, you have to take on of the big tires off the back put it on the front and put the spare on the back to be safe other wise the smaller tire is going to want to pull to that side and be very hard to drive. Best to get a matching spare.