New Homes
New Homes
HST would prove disastrous for campaign
AT a total of 55 to 45 per cent, voters in British Columbia opted to return to the old PST/GST form of taxation instead of the Harmonized Sales Tax. The hated HST was brought in by then-premier Gordon Campbell on July 1, 2009, contrary to an election promise of his three months earlier.
The B.C. referendum was unprecedented in nature and displayed dissatisfaction with more and additional taxes.
The HST is a combination of the PST and GST with a few major differences. Each of the PST and GST has various tax exemptions within them. Under the HST, almost all of the exemptions disappear and pretty much all of consumption bears the full brunt of the combined tax.
The biggest problem with this tax is the sweeping generalizations it makes. It taxes without consideration the necessities of existence. It taxes food, clothing and shelter equally and harshly. Without necessary exemptions in place, it put certain items out of the grasp of some consumers.
In this column, we deal primarily with residential construction, so we will use that as our example.
A unilaterally applied HST in Manitoba would increase the price of the average new home by over $15,000. That is enough to kill a sale and the thousands of jobs that go with the materials and labour associated with it.
We could not withstand an increase of $15,000, especially knowing that it all went into a general bottomless pit of taxes.
Winnipeg and Manitoba are the renovation capitals of Canada. In B.C. and Ontario, the HST increased each renovation project by 2.5% in costs and served to become a tax on a tax. Renovations suddenly became the domain of the underground economy.
Rather than making more money, governments found themselves making less because consumers opted to find people who would do the work for cash, no contract or questions asked.
What does that mean for us in Manitoba? We're not likely to hear a lot about the HST through Oct. 4 when we have our provincial election. Publicly opening the HST window would be a disastrous campaign strategy.
However, that doesn't mean we shouldn't ask for a hard and fast HST platform by all parties. Much like many other ideas, just because something was implemented in B.C. and Ontario doesn't make it a good idea for Manitoba.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Time for government to revisit rebates
THE Canadian Home Builders' Association has served notice to the federal government that it's time to look at new housing and renovations in order to right both an old and a new tax wrong.
Although the federal budget does not come forward until much later, the time is ripe to make a case for bringing legislation up to date.
When the GST was introduced in 1991, a new housing rebate was introduced to ease the burden on consumers. This rebate reduces the actual rate of GST payable to 3.2 per cent from five per cent, depending on the price of the new home. When these GST thresholds were introduced in 1991, the federal government estimated 95 per cent of all new home buyers would be eligible for the rebate.
In the goods and services tax technical paper, it stated that the government would review these thresholds every two years and adjust them as necessary to reflect changes in economic conditions and housing markets.
However, the GST rebate thresholds for new houses have remained frozen since 1991, 20 years ago. The CHBA is asking the federal government to review this policy with respect to protecting housing affordability.
On the renovation side, the home renovation tax rebate is necessary to restore fairness in the tax system. Prior to the introduction of the GST, the nine per cent federal sales tax applied only to the materials portion of home-renovation expenditures. In addition, the FST was applied to the prices at the factory as opposed to the full retail price.
Since materials only account for a portion of the full cost of a renovation, it was estimated the FST represented only a 2.5 per cent tax on the delivered cost of a home renovation. The current GST taxes the same project at five per cent, twice the previous amount. In provinces where HST (harmonized sales tax) is in place, the tax burden is even greater.
Another bonus associated with a home-renovation tax rebate is its contribution towards battling the underground economy. By requiring homeowners to have receipts to back up their HRTR claims, the government would deal a major setback to underground operators and help legitimate, honest tax-paying contractors.
In the end, affordability must be the primary benefit of these tax-saving measures. The CHBA is taking its case to Ottawa in hopes that all may share in this benefit.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Mortgages go green as big banks offer incentives to buyers
The trend toward green living has finally caught the attention of the banking industry.
Banks have watched as consumers have made greener choices in everything from washing detergent and light bulbs to high-efficiency furnaces and solar-energy panels.
With consumers interested in greening their lives, most of Canada's major banks have seen the opportunity to offer "green mortgages," which offer homebuyers a discounted interest rate and other incentives to buy more environmentally sensitive houses or perform upgrades aimed at lowering their environmental footprint.
"We made the decision (to offer green mortgages) to respond to that market," says Katie Archdekin, head of mortgage products for BMO. "We wanted to encourage customers to make positive change and positive choices for the environment. We've had great response."
Consumers, especially first-time buyers, are increasingly looking to green home upgrades to help the environment and lower the carrying costs of owning a new home.
According to surveys conducted by Leger Marketing, while Canadians are interested in lessening their impact on the environment, the decision to buy a "green home" is really being driven by saving cash. More than 59 per cent of respondents cite financial savings as the main reason for making eco-friendly upgrades and purchases.
The results are not surprising, considering more than 51 per cent of survey respondents say utility costs are the biggest surprise financially when it comes to owning a home.
Having new windows, doors and a high-efficiency furnace can go a long way to help make those carrying costs more palatable, according to Leger, which found 92 per cent of Canadian respondents recognize the cost advantages of energy-efficient home upgrades.
It also found nearly half of all homebuyers plan to make investments in energy-efficient upgrades in the next year, especially with the anticipated extension of the federal government's EcoEnergy Retrofit program. The program allows Canadians to write off a portion of their green home renovations on their taxes.
The green trend isn't just infecting resale homebuyers. According to an EnerQuality Green Building survey released in November 2009, more than 40 per cent of Ontario homebuyers are willing to pay up to $10,000 more for a new green home, or a home that is Energy Star-certified. That number is almost double the 22 per cent of homebuyers who were willing to spend that amount of money in 2008.
Farhaneh Haque, regional manager of Mobile Mortgage Specialists at TD Canada Trust, says with the additional money buyers are willing to spend on green homes and upgrades, many have been inquiring about discounts and incentives from the banks to help them.
"Environment has become increasingly popular. A lot of politicians are talking about it, the general public is talking about it, there are a lot of home-renovation projects that you see around or on TV that are talking about it, major suppliers of home appliances are talking about it. It's become very evident in the market," says Haque.
"It just made a lot of sense to have a product that supports our clients' motivations. It encourages clients to seek out home renovations and take part, or participate, in environmental initiatives. It encourages green behaviour."
While almost all of Canada's big banks are offering green mortgages, the loans aren't open to just anyone. Buyers must qualify for the green loan by proving the house they are buying meets certain green-energy standards, or that they will be completing certain green upgrades to the home shortly after moving in.
Incentives the banks offer vary. Some will provide rebates equal to the cost of a home-energy audit, which is around $300, and then a cashback incentive that can be used for green upgrades. Others offer discounts to posted mortgage rates.
Eco-mortgages
With so many different "green" mortgage offerings out there, wading through them can be a daunting task. Below is a list of a few of the more popular options:
RBC Energy Saver Mortgage
Receive a $300 rebate on a home energy audit.
Get a five-year, fixed mortgage with an annual interest rate of 4.34 per cent, more than one per cent lower than the regular posted five-year rate.
TD Canada Trust Green Mortgage
Offers customers one per cent off the posted interest rate on a five-year, fixed-rate mortgage.
Customers also receive a cash rebate of up to one per cent of the amount of the mortgage when homebuyers make Energy Star-qualified appliance purchases and home upgrades or purchase CSA-approved solar panels.
TD will also donate $100 to the TD Friends of the Environment Foundation charity for each Green Mortgage opened.
BMO Eco Smart Mortgage
Offers buyers of green properties a 3.89 per cent annual interest rate on their mortgage.
In order to qualify for the BMO Eco Smart Mortgage, the home must meet certain requirements as confirmed by a third-party appraiser (or energy auditor) arranged by BMO.
Canada Mortgage and Housing Corp. (CMHC) incentive
If a person uses CMHC-insured financing to buy an energy-efficient home or purchases a house and makes energy-saving renovations to make it more energy-efficient, a 10 per cent refund on the mortgage loan insurance premium may be available.
New Homes
Contract is the basis for a good contractor
Home renovations continue to be a popular topic in Winnipeg and across the country. The fact our city has the third-oldest housing stock in the country (behind only Halifax and Montreal) generally translates into a need for renovations.
More Manitobans indicated their intent to renovate their homes in the coming year than any other province in Canada. Some people look at renovating as an exciting new adventure; others see it as a headache. If you take the necessary steps to avoid certain pitfalls, it can be both exciting and rewarding.
First, remember the cheapest deal is not necessarily the best deal. This is a close-knit community, so everyone knows someone who knows someone who is handy with a hammer. That someone may also be willing to do the job on the side for cash, no questions asked. Just think of the money you can save by not paying PST and GST. You'll save even more by not taking out permits, fiddling with cumbersome contracts or worrying about insurance.
Bad ideas all around.
Just as you're hopefully utilizing the services of a professional for medical and financial matters, you should also consult a professional when it comes to home renovations.
The RenoMark logo is your sign of professionalism and confidence. The RenoMark program is nationally recognized by the Canadian Home Builders Association and is now operating in six provinces. Manitoba was actually the first province to adopt RenoMark.
A RenoMark renovator provides a detailed written contract for all jobs. Why is this important? If you don't have a contract, you don't have any control over the scope of work to be done. Furthermore, when the job is finished, you don't have any proof the job was ever done. If there's a problem with materials or labour, you're left holding the bag -- your "contractor" never officially existed.
A RenoMark renovator takes out all applicable licences and permits and carries $2 million in liability insurance. Why is this important? If you don't take out the necessary permits, the job never legally happened. In the event of an accident, fire, flood or some other problem, you may find that you are not insured for damage to or resulting from this work. As well, whoever takes out the permits is the prime contractor. Consult the RenoMark and MHBA websites for more information.
Mike Moore is president of the Manitoba Home Builders' Association.
New Homes
Showhomes open throughout the year
MANY people suffer from the misconception that new showhomes are only open twice a year, during the Spring and Fall Parades of Homes. Although those two events certainly receive the greatest publicity and feature 100 new homes at one time, various members of the Manitoba Home Builders Association proudly feature and staff their showhomes throughout the year.
We are currently at the midway point between the 2011 Spring Parade of Homes, which ran in March, and the 2011 Fall Parade of Homes, which will be featured from Sept. 17-Oct. 8. So, for those of you who require a new-home fix between Parades, now is an ideal time.
This spring featured terrific weather for March, and September is always nice. But you're guaranteed short sleeves and slip-ons in July and August, making your tour that much more pleasurable. Besides, it will give you a chance to check out the air conditioning in the home, and on most days parking near the various showhomes will be easy.
So, how do you know what's open and where to look?
The Parade of Homes magazine produced by the Winnipeg Free Press is a staple for all Parade-goers. Most people keep it handy and check off the homes and neighbourhoods they visit.
But, assuming you haven't kept your magazine from last March, not to worry. You can still access the Spring Parade magazine on the Manitoba Home Builders Association website at www.homebuilders.mb.ca. Although not all of the properties featured in the spring are still showhomes, it will bring you back to the builders and subdivisions that you frequented in March.
From there, you have a variety of options. You can download the map on page 41 and visit the neighbourhoods that interest you, stopping in at the various showhomes on display. On pages 42-67, all of the Spring Parade showhomes are listed. Simply make note of those builders whose homes you're interested in, go to the MHBA website and click the link that will take you directly to that builder's site. Many will have their showhomes listed along with the times they're open.
Even simpler, turn a couple of pages in today's paper and you'll see a number of ads for showhomes listed by MHBA builders.
No matter how you access them, the important thing to know is that the various showhomes are open for business and your viewing and visiting pleasure. Take your time, visit the models and locations that catch your fancy, talk to the sales representatives and enjoy the introduction to your next new home.
Mike Moore is president of the Manitoba Home Builders' Association.