Lots in the media this past week about the new BC budget. I think it's a good one overall for the housing industry. Certainty is always better than uncertainty. Parts of the world continue to struggle while we here in the West are going pretty strong.
The HST will be gone as of April 1, 2013. But for the next year, it's good that the ceiling for the 5% rebate on a new home purchase is raised to $850,000 from $525,000. As of April 1, 2012 the maximum rebate will then be $42,500. Note the HST applies only to new homes and new building lots. Resales do not have HST owing.
For first-time home buyers, the new tax break will help young people primarily in the lower mainland usually buying new condos. The formula involves single person or combined family income thresholds, to receive up to $10,000 back on their personal taxes.
For seniors, there is a $1,000 renovation tax credit which may help them remain in their homes longer. This is a good thing. Although it would have been better to see a tax break for all of us to help stimulate the renovation contractor industry. A lot of home owners have been holding off on renovating until April 1st 2013. Not me, I've been renovating since Christmas this year as I don't want to wait and I do want to deal with reputable contractors who give accurate quotes, stand by their work and offer me receipts at the end of the job!
It's important to realize that for every home sale in BC there is an average of $60,000 spent in spinoffs. Also, that for every new home start in BC there are about 3 full-time jobs generated each year. So overall, the housing industry is very important to our BC economy.