Should Government Profits on Realty Be Lowered
Below is a MRR and PLR article in category Finance -> subcategory Real Estate.
Should Government Profits on Realty Be Reduced?
Summary:
If you're planning to sell your home this spring and feel overwhelmed by the competition from new houses, don't worry. Although the government takes more money from us than we might realize, there's one tax that could actually benefit you.Article:
Are you looking to sell your home this spring but feeling discouraged by the number of new homes on the market? You should know that while the government gets a considerable portion of our money, one tax might surprisingly work in your favor.
A recent study commissioned by builder and broker mortgage associations highlights a major drawback in home buying: the Canadian Government imposes a Goods and Services Tax (GST) on new homes, while resale homes are exempt. This can mean an extra $20,000 added to the cost of an average home?"a cost not included in the asking price. Since the introduction of the GST in 1991, home prices have more than doubled, which also means the GST amount has doubled. With prices climbing, fewer people benefit from the available rebates. Back in 1991, over 90% of homeowners qualified for a full rebate, but today, only 52% do. Although this tax was meant to be reviewed biennially, it hasn't been adjusted once.
The Chairman of the Residential Construction Council of Ontario points out that from 1991 to 2007, the GST paid per new home increased by 95%, far outpacing the growth of the average weekly wage in Canada.
If you’re selling your home, you'll benefit as your sale won’t include a hefty GST bill. However, there's another issue affecting both your home sale and that of new homes. The Canadian Association of Accredited Mortgage Professionals reviewed the Home Buyers Plan from 1992, which allows first-time buyers to withdraw up to $20,000 tax-free from their Registered Retirement Savings Plan for a down payment. This amount has not increased since its inception, despite home prices rising by 104%. The report criticizes the plan for becoming less effective in supporting Canadians’ homeownership dreams.
Land transfer taxes are another area where governments profit significantly. Toronto is set to increase its land transfer tax (LTT) on February 1st, making it the highest in Canada, with the average house paying $8,300. In British Columbia, land taxes rose by 179%, averaging nearly $7,000 per transfer, while Quebec increased theirs by 136% to $1,800 per home.
Will Dunning, the report's author, argues that these tax increases are unjust. He calls them discriminatory, as they fail to justify the government’s or society’s expenses related to home buying.
In conclusion, while some taxes can indeed work in your favor if you're selling, the overall tax burden on real estate remains a significant issue needing attention and reform.
You can find the original non-AI version of this article here: Should Government Profits on Realty Be Lowered .
You can browse and read all the articles for free. If you want to use them and get PLR and MRR rights, you need to buy the pack. Learn more about this pack of over 100 000 MRR and PLR articles.