Should Government Profits On Realty Be Lowered

Should Government Profits On Realty Be Lowered



Should Government Profits on Realty Be Lowered?
If you are planning to​ sell your house this spring, and are disheartened by the amount of​ brand new homes for sale in​ your area, take heart! It seems the Government slide off more of​ our bucks than we probably realize, but at​ least one of​ these taxes could work in​ your favor.
A new report that has been commissioned by combined builder and broker mortgage associations has been be-wailing one big disadvantage when buying a​ new home .​
The Canadian Government will levy GST on a​ new home, whereas re-sale homes are exempt .​
On an​ average house price this can add an​ extra $20,000 into the outlay .​
This is​ $20,000 that is​ not included in​ the asking price, it​ is​ an​ add on .​
Since the GST was introduced in​ 1991, house prices have more than doubled, which means that the GST portion has doubled too .​
However, the house prices have jumped up and over the rebate ceiling and many people are not able to​ take advantage of​ the rebate anymore.
This means that whereas, in​ 1991 when the bill was introduced, over 90% of​ house owners qualified for a​ full rebate, now only 52% qualify .​
The GST bill was supposed to​ be reviewed every two years, but the rates have never once been adjusted.... .​
The Chairman of​ the Residential Construction Council of​ Ontario, has pointed out that the effective amount of​ GST paid per new home increased by 95% from 1991 to​ 2018 .​
This is​ 2.5 times more than the rate of​ growth for the average weekly wage in​ Canada .​
All this is​ of​ interest to​ you if​ you are selling your home, as​ your home will not include the hefty GST bill at​ the end of​ the sale .​
Unfortunately, the report turned up one other deficiency which will affect your house sale, as​ well as​ also affecting the sale of​ new homes.
The Canadian Association of​ Accredited Mortgage Professionals investigated the Home Buyers Plan which was introduced in​ 1992 .​
Under this tax umbrella, first time buyers are allowed to​ withdraw up to​ $20,000 tax free from their Registered Retirement Savings Plan to​ be used as​ a​ down payment on a​ home .​
This is​ still in​ effect, but this amount has also not been increased since its initiation, while house prices have gone up by 104%! The Home Buyer's Plan has been renounced in​ the report, as​ 'becoming less effective as​ a​ means to​ support Canadians in​ their aspirations for home ownership' .​
Land transfer taxes are another lucrative area for government cream-offs .​
Toronto is​ just about to​ put theirs up at​ February 1st., making them the holder of​ the highest land transfer tax (LTT) in​ Canada .​
In Toronto the average house pays $8,300 in​ LTTs .​
Land Taxes have also increased in​ much larger percentages than the house prices that they are related to.
In B.C .​
they rose by 179%, asking an​ average of​ nearly $7,000 per land transfer .​
Quebec increased their LTT by 136% to​ $1,800 .​
per home .​
If anyone feels like taking up the challenge, the author of​ the report, Will Dunning, has stated that these increases fail to​ meet any definition of​ fairness .​
He says that they are a​ discriminatory tax and as​ such, have to​ justify the government's or​ society's at​ large expenses for the related service ( home buying) .​
This, it​ does not do.




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