Older couple - first home

Bricks & Sticks

by Desi Auciello

Desi Auciello is the 2006 GTHBA President, and is also president of Cachet Estate Homes.

A Home Owning Nation is a Strong Nation

Date: May 5, 2006 

"A home owning nation is a strong nation," said Stephen Harper when he revealed his campaign promise to reduce the GST on new housing by 1 per cent.

Harper's announcement demonstrated a clear recognition of the strategic importance of the homebuilding and renovation industry within the Canadian economy.

"In addition to supporting new home purchasers, the plan to cut the GST will also help the residential construction industry. Overall, the construction industry employs more than one million Canadians, many of them in residential construction and renovation," Harper said.

This week, after talking the talk, Prime Minister Harper walked the walk by following through on his promise -- and then went a step further. The details of the GST reduction contained in the May 2 federal budget reveal some great news for home buyers.

Starting with the obvious, the GST has been reduced from 7 per cent to 6 per cent, effective July 1, 2006. As the biggest ticket consumer item that one can possibly buy, this is, quite simply, a huge win for home buyers.

Don't Delay

It gets better. We home builders were concerned that the GST reduction would come into effect some day down the road and that purchasers would sit on the sidelines waiting for that reduction.

The federal government smartly foresaw this problem and included a transitional rule that gives the benefit of the GST cut to homebuyers effective immediately -- even though the tax reduction doesn't come into effect until July 1.

Specifically, any purchaser who enters into an agreement of purchase and sale after May 2 will be subject to the lower 6 per cent GST
rate, so long as the deal closes on, or after, July 1. So if you've been thinking of buying a new home, there is no need or advantage to delay your purchase.

Housing Affordability

Commenting on the GST cut, Dave Benbow, president of the Canadian Home Builders' Association said that "the federal government's decision to reduce the GST is a major benefit to new home buyers. This action improves housing affordability for many Canadians. It's also good news for owners who are considering home renovations."

Benbow did call on the government to take the next important step to improve housing affordability by indexing the GST rebate thresholds to keep pace with rising home prices.

"We appreciate that everything can't be done in one budget," he said. "But the current rebate thresholds impose a significant penalty on buyers who live in communities where home prices have risen steeply."

Benbow is referring to the fact that the full GST rebate applies only to homes priced up to $350,000 -- and that there is no rebate on homes over $450,000.

"The rebate thresholds have not been adjusted since the GST was introduced, despite the promise of indexation," Benbow said.

"If the rebate thresholds had been adjusted to reflect the increase in house prices, the thresholds now would be $450,000 to $580,000. Indexing is long overdue and it's the fair thing to do."

Go Great Gulf

Great Gulf Homes is the 2006 GTHBA home builder of the year, claiming this title for the second time in the nine-year history of the coveted award. The award, which is based on the association's independent survey of the builders homeowners, recognizes the builder who provides exceptional quality and service from the point of first contact with the home buyer right through to the after-sales service stage of the process.

Lanterra Developments took the award for community of the year for the Residences of Maple Leaf Square. project of the year, low-rise honours went to Cachet, Rosehaven, Sequoia Grove an Townwood Homes for Riverstone Golf and Country Club, while The Residences of the Ritz Carlton owns bragging rights as the high-rise project of the year.

Multiple winners on the evening included Camrost-Felcorp, who swept the suite design categories and added the best high-rise sales office award for a total of four trophies. Tribute Communities also took four awards -- including the Riley Brethour award bestowed upon Mark Cohen, vice-president of marketing and sales. The Riverstone builders, Tridel and Red Leaves/Muskoka each took home three trophies.

From an agency/design perspective, Montana Steele once again lead the way, sharing in five awards on behalf of various builders. Page + Steele architects figured in four awards, as did LA Inc., while the Brand Factory, Toolbox Strategies and Partnership Marketing shared in three each.