GST cut good news for new homebuyers and homeowners

The tax changes outlined in the federal government's economic statement will once again bring significant savings to new homebuyers but will also benefit existing homeowners.

The average priced single-family home in the Toronto Real Estate Board districts in 2007, costs over $375,000. Buyers save $3,750 on that, not mentioning the 1% cut we save already from last years GST reduction, which would make it $7,500 compared to 2 years ago!!

Existing homeowners
can save on home renovations. The Canadian Home Builders Association offer the following guidelines for home renovations and how the GST is applied.

• Renovations done before or after Jan 1, 08, but invoiced on or after that date will qualify for the 5% GST.
• For renos done and invioced Jan 1, 08, but subject to a down payment before Jan 1, 6% GST will be collected on the down payment and 5% on the rest of the fee.
• For renovations done after Jan 1, 08, but subject to a deposit paid before Jan 1, the 5% rate applies. A deposit is not treated as a payment for a supply of goods or services until the supplier applies it against the consideration payable for the supply.

And ... got it? Well, if that was too much and involved too many times the word supply for you then you can always take a look at: www.cra-arc.gc.ca for further information.


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