Budget provides boost for new home buyers
The 2012 budget has good news for property virgins and the home-building industry, but was disappointing for those hoping to simply improve their living quarters.
First-time buyers of newly constructed B.C. homes will benefit from a temporary one-time refundable income tax credit based on income and the price of the home. The credit will be calculated as 5% of the purchase price of the home up to a maximum of $10,000 for newly built housing, when both the HST applies and the sale closes on or after Feb. 21, 2012.
“This is great for first-time homebuyers; they have a difficult time in this region getting on to that first step of the homeownership ladder because of price of homes,” said Peter Simpson of the Greater Vancouver Home Builders’ Association.
On Friday, the province already announced it was raising the housing rebate threshold to $850,000, meaning more than 90% of newly built homes will be eligible for a provincial HST rebate of up to $42,500.
The tax break will spur construction and creates jobs, which had idled with the news that that HST would be phased out in 2013, proponents said.
Every housing start generates almost three full-time jobs for one year, across the construction, manufacturing and raw materials industries, Simpson said.
“Not just the person hammering nails but also work in the manufacturing industries, the doors, flooring, kitchen cabinets and all other products and materials,” he said.
The new tax measures provide no breaks for homeowners hoping to renovate.
“It’s disappointing there was nothing to address the impact of the HST on home renovations,” said Simpson, explaining while waiting for the “HST to disappear,” people are circumventing all the rules and regulations and “getting somebody to do it for cash.”
“It’s a huge concern for us. The HST fueled an already-burgeoning cash economy. We’re still left with that challenge until April 1, 2013.
The only exception was for seniors or anyone sharing a home with a senior relative, who can get a home renovation tax credit of up to $1,000, designed to allow those aged 65 and over to remain in their own homes longer.