The election of Stephen Harper's Conservative government comes as welcome news to the home construction industry. President David Wassmansdorf of the 91原创 Home Builders' Association welcomed Harper's promise to reduced the GST. In a statement made prior to the election, Wassmansdorf said, "Reducing the GST on new homes would be a real benefit for buyers."
When implemented, the new tax picture means that a new home purchased for $200,000 would produce a $2000 savings on GST, according to a Conservative Party backgrounder. When the full cut is implemented, that savings would double to $4,000. According to CHBA calculations, the combination of the reduced GST with new housing rebates would return the federal sales tax on new homes to that seen prior to the introduction of the GST in 1991.
"Our association has been urging that this be done since the GST was first introduced," said Wassmansdorf.
Lindalee Brougham, president of CHBA's Victoria branch, says of the GST reduction, "It will make things a bit easier for new home buyers." Brougham cautions that with a minority government, the passing of a GST reduction is far from secure. Whether prospective buyers will delay their purchases in anticipation of the GST reduction is unsure, but Brougham speculates that the savings are not substantial enough to slow the current new housing market.