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GST cut in 2008 is good news for home buyers

New homes closing in January will save 1% tax under new Federal budget

The conservative government’s recent economic update issued on October 30 left a lot of Canadians smiling.  And why not?  With government revenues now running higher than expected as the economy booms, the Tories have pledged retroactive income tax cuts, ‘bold’ corporate tax reductions, lowering the GST to 5% as of January 1, 2008, and still having enough surplus left over after the tax cuts to pay down the national debt by another $10 billion this year.  And while this is good news all around, it’s particularly so for Canadian home buyers.  

The tax changes outlined in the federal government’s economic statement will make it easier for Canadians to realize their dream of home ownership in a number of ways.  Lower income tax means more disposable income to devote to a home purchase, and the one per cent cut in the GST will provide savings to new home buyers closing their sale after January 1st.   According to an example provided by the Canadian Real Estate Association (CREA), using the sliding GST scale that applies to the cost of new homes, a buyer of a $375,000 house in British Columbia would save $2,738.

Even if you’re buying a resale home that is not subject to the GST, the planned one per cent tax reduction will also help Canadians pay for home renovations, or in the purchase of appliances or furniture.  According to research conducted by CREA, Canadians spend an average of $7,475 on renovations when they buy a home, and spend another $3,950 on furniture and appliances. The GST cut represents $114 in savings based on these averages.

Not sure how much home you can afford?  Your local Coldwell Banker® sales professional will be happy to sit down and ‘crunch the numbers’ with you, and show you some creative financing options you may have never considered.  Why not take a few minutes and find out how to turn your dream of home ownership into a pleasant reality!  

Contact me at http://www.epsteinrealestate.com to take advantage of my expert advice.

Published Sunday, December 30, 2007 10:06 PM by Jordan Epstein

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