Dear Friends in Real Estate:
The following is from Garth Turner who is the MP from Halton.
House of Commons
Hon. Garth Turner, PC, MP
Tax cut helps keep Canadian dream affordable
OTTAWA – The dream of home ownership was given a boost yesterday when the first Conservative budget in 13 years sliced the sales tax on new houses by a full percentage
point. That will have the effect of saving buyers of a $200,000 home more than $1,200 and more than $3,000 on homes priced above $300,000.
“This is money that simply does not need to be borrowed by many new homebuyers, reducing the size of the mortgage,” MP Garth Turner says. “That is good news because it
increases the affordability of new homes at a time when rising prices have forced many buyers out of the market, plus it improves family finances by reducing debt for others.
This is a great example of a government budget policy actually improving the lives of Canadians in a fairly dramatic way.”
The federal budget reduced the federal goods and services tax from 7% to 6%, effective July 1. Houses for which sales agreements are signed after the budget date, and which
close after July 1 will have the new, reduced tax in place. Homes which have already been purchased, but are not yet occupied, will also get the tax break, by way of a tax
adjustment, reducing the GST to 6%.
Today at a media event at a soon-to-be-built new housing development in Kanata, outside Ottawa, Canada’s largest home builder, Mattamy Homes, voiced its approval of the GST
reduction. In addition, officials of the Ottawa Carleton Home Builders Association made it clear that the lower sales tax and the increased affordability it brings are great news for
an industry starting to be impacted by the spiralling price of residential real estate. “This appears to be a winning situation not only for homebuyers, but for the industry
providing those houses,” Turner said. ”Many experts believe that in the eighth year of a real estate expansion that rising construction costs and restricted land availability would
squeeze out more and more buyers. So the timing of this GST cut could hardly be better. It is a small but highly significant step in ensuring the Canadian dream stays alive for
hundreds of families who will move into houses in these fields which are now just empty. It shows this government is committed to taxing people less, and improving their lives.”
For more information:
Garth Turner, MP (613) 996-7046
Beth Shropshire, Mattamy Homes (416) 466-7044
- 30 -
House of Commons
Hon. Garth Turner, PC, MP
GST impact on new home buyers
Backgrounder
The 2006 Federal Budget has reduced the rate of the Goods and Services Tax from 7% to 6% on all taxable items, effective July1, 2006. Currently the GST applies to the sale of
new homes, and the impact of the tax is offset by the New Housing Rebate, which is equivalent to 36% of the tax payable.
There is typically a lag time of several weeks or months between the time a purchaser agrees to buy a new home and becomes legally committed to doing so, and the actual
day the transaction is completed and possession takes place. The budget makes it clear that buyers signing purchase agreements on any day after the budget was announced
will receive the lower tax rate, regardless of whether occupancy occurs before or after July 1.
Under the proposed measures, the following specific transitional rules will apply in respect of sales of real property.
Ownership or Possession Transferred before July 1, 2006: The 7 per cent rate will apply to all of the consideration for a supply by way of sale of real property if ownership
of the property, or possession of it under the agreement of purchase and sale, is transferred to the buyer before July 1, 2006.
Ownership and Possession Transferred on or after July 1, 2006: The 6 per cent rate will apply to all of the consideration for a supply by way of sale of real property if under
an agreement of purchase and sale entered into after May 2, 2006, both ownership of the property, and possession of it under the agreement, are transferred to the buyer on
or after July 1, 2006.
Written Agreement Entered Into on or before May 2, 2006: For sales of houses, apartment buildings and other residential complexes, made pursuant to a written
agreement entered into on or before May 2, 2006, GST will apply at the rate of 7 per cent, even if ownership and possession of the real property are both transferred on or
after July 1, 2006. In these circumstances, where transfer of ownership and possession both take place on or after July 1, 2006, the purchaser will be entitled to file a claim with
the Canada Revenue Agency to be paid a Transitional Adjustment that reflects the GST rate reduction to 6 per cent net of any corresponding rebate adjustment.
(For more details please refer to www.garth.ca)
Regards,
Karim Kanji
RealCash
The following is from Garth Turner who is the MP from Halton.
House of Commons
Hon. Garth Turner, PC, MP
Tax cut helps keep Canadian dream affordable
OTTAWA – The dream of home ownership was given a boost yesterday when the first Conservative budget in 13 years sliced the sales tax on new houses by a full percentage
point. That will have the effect of saving buyers of a $200,000 home more than $1,200 and more than $3,000 on homes priced above $300,000.
“This is money that simply does not need to be borrowed by many new homebuyers, reducing the size of the mortgage,” MP Garth Turner says. “That is good news because it
increases the affordability of new homes at a time when rising prices have forced many buyers out of the market, plus it improves family finances by reducing debt for others.
This is a great example of a government budget policy actually improving the lives of Canadians in a fairly dramatic way.”
The federal budget reduced the federal goods and services tax from 7% to 6%, effective July 1. Houses for which sales agreements are signed after the budget date, and which
close after July 1 will have the new, reduced tax in place. Homes which have already been purchased, but are not yet occupied, will also get the tax break, by way of a tax
adjustment, reducing the GST to 6%.
Today at a media event at a soon-to-be-built new housing development in Kanata, outside Ottawa, Canada’s largest home builder, Mattamy Homes, voiced its approval of the GST
reduction. In addition, officials of the Ottawa Carleton Home Builders Association made it clear that the lower sales tax and the increased affordability it brings are great news for
an industry starting to be impacted by the spiralling price of residential real estate. “This appears to be a winning situation not only for homebuyers, but for the industry
providing those houses,” Turner said. ”Many experts believe that in the eighth year of a real estate expansion that rising construction costs and restricted land availability would
squeeze out more and more buyers. So the timing of this GST cut could hardly be better. It is a small but highly significant step in ensuring the Canadian dream stays alive for
hundreds of families who will move into houses in these fields which are now just empty. It shows this government is committed to taxing people less, and improving their lives.”
For more information:
Garth Turner, MP (613) 996-7046
Beth Shropshire, Mattamy Homes (416) 466-7044
- 30 -
House of Commons
Hon. Garth Turner, PC, MP
GST impact on new home buyers
Backgrounder
The 2006 Federal Budget has reduced the rate of the Goods and Services Tax from 7% to 6% on all taxable items, effective July1, 2006. Currently the GST applies to the sale of
new homes, and the impact of the tax is offset by the New Housing Rebate, which is equivalent to 36% of the tax payable.
There is typically a lag time of several weeks or months between the time a purchaser agrees to buy a new home and becomes legally committed to doing so, and the actual
day the transaction is completed and possession takes place. The budget makes it clear that buyers signing purchase agreements on any day after the budget was announced
will receive the lower tax rate, regardless of whether occupancy occurs before or after July 1.
Under the proposed measures, the following specific transitional rules will apply in respect of sales of real property.
Ownership or Possession Transferred before July 1, 2006: The 7 per cent rate will apply to all of the consideration for a supply by way of sale of real property if ownership
of the property, or possession of it under the agreement of purchase and sale, is transferred to the buyer before July 1, 2006.
Ownership and Possession Transferred on or after July 1, 2006: The 6 per cent rate will apply to all of the consideration for a supply by way of sale of real property if under
an agreement of purchase and sale entered into after May 2, 2006, both ownership of the property, and possession of it under the agreement, are transferred to the buyer on
or after July 1, 2006.
Written Agreement Entered Into on or before May 2, 2006: For sales of houses, apartment buildings and other residential complexes, made pursuant to a written
agreement entered into on or before May 2, 2006, GST will apply at the rate of 7 per cent, even if ownership and possession of the real property are both transferred on or
after July 1, 2006. In these circumstances, where transfer of ownership and possession both take place on or after July 1, 2006, the purchaser will be entitled to file a claim with
the Canada Revenue Agency to be paid a Transitional Adjustment that reflects the GST rate reduction to 6 per cent net of any corresponding rebate adjustment.
(For more details please refer to www.garth.ca)
Regards,
Karim Kanji
RealCash
