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The Canadian Home Builders ’
Association is a non-profit organization
dedicated to education, professionalism, consumer GST REBATE ELUDES MOST VICTORIA HOMEBUYERS Last week’s column outlined the significant impact housing has on Greater Victoria’s economy. For example, in 2005 more than 9,360 jobs were generated by new construction and renovations in our region, generating $689 million in economic benefits. These jobs and economic benefits are available only when consumers can afford to purchase a new home or renovate their existing home. That affordability is presently being eroded by rising interest rates and increasing costs of land, materials and labour. One initiative that could help address housing affordability is indexation of the federal GST rebate program. The GST rebate for new homes was introduced in 1989 to increase housing affordability, however housing prices have increased to where the rebate is no longer available to a majority of new homebuyers. In 1991, 95% of Greater Victoria homebuyers qualified for the full GST rebate. In 2006, due to inflation, 56% of new homebuyers receive no rebate. Only 12% of new homebuyers receive the full rebate, while the remaining buyers receive a portion of the rebate. The average price of a new home in Greater Victoria is more than $500,000, and the rebate cut-off is $450,000. By failing to index the rebate as promised in 1989, the Federal Government pocketed an additional $150 million in GST revenues in 2005, at the expense of new homebuyers. This erodes the intent and integrity of the GST rebate program, which is to improve housing affordability. It also erodes the housing industry’s ability to create training opportunities, jobs and economic benefits in communities across Canada. Indexing the GST rebate would help sustain these benefits, while protecting the integrity of the program. A 28% increase in the threshold would bring the program up to date, resulting in a GST rebate cut-off of $576,000 for 2006. At this threshold, more than 20,000 new homebuyers across the country would qualify for the full GST housing rebate. This would enhance housing affordability, as well as employment and economic benefits for many communities. As interest rates increase, adding to housing costs, the federal government must act now to index the GST rebate as promised in 1989. It is in the best interests of consumers, young people seeking training and employment, and the integrity of the government’s own program. For information on hiring a professional contractor or renovator, visit www.chbavictoria.com. See award-winning homes at www.careawards.com . Look for "Ask a Home Building Professional" every Wednesday in the Times Colonist. |
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CHBA Victoria #1-3690 Carey Road, Victoria, BC,
V8Z 4C2 |
