Archive for the ‘New Homes’ Category
The HST is no cause for alarm
An Ontario report shows how small the HST’s impact will be on middle-class households, and a deeper look provides a lesson for those British Columbians thinking of joining the anti-tax crusade.
Globe and Mail
Anti-HST hysertics ought to look at some new hard data coming out of Ontario. It shows how small the impact will be on Ontario’s middle-class households, and a deeper look at the study provides a lesson for those British Columbians thinking of joining the anti-tax crusade.
Using data from the Ministry of Finance’s tax records, counting 5.3-million households, and spending habits from Statistics Canada (based on 26,000 households), the Ontario government study is as reliable a test run of the likely effects of implementing the HST as we’re going to see.
In the first year, buoyed by one-time tax incentives, almost all households will enjoy a net cash benefit, in the hundreds of dollars. By the third year, households making up to $60,000 will still be better off, while households making more than that will pay a modest price (from $45 to $295 for households making $60,000 to $150,000). Over the long term, it is practically a wash.
If anything, it presents a worst-case scenario for what taxpayers can expect. The projections do not factor in the economic growth that would inevitably be brought on by implementing the HST and making other tax changes (such as cuts to corporate, capital and income taxes). It also assumes that businesses would pass on only a very modest proportion of savings from falling prices for their goods on to consumers – only 20% in the first year, and 90% in the third year, rates below those made in other projections, including by the Bank of Canada.
It’s important to dig into this level of detail because of too much of the opposition around the HST is driven by fear, not fact. The HST’s costs are explicit while the benefits are largely hidden. Many services that were once only saw federal tax (the GST, at 5%) will soon be taxed at the provincial rate as well, adding up to 13% in sales taxes. These are inescapable realities, and some sectors will be hurt.
The opponents fail to mention the other side of the equation, though. Items that are currently taxed multiple times, as they go from raw material to finished good, will fall in cost through a system of tax credits. 70% of these savings will go to government, exporters and towards reduced home construction costs, creating indirect benefits for consumers.
The net pocketbook impact is modest – around the price of a family trip to the movies – using the most conservative assumptions, and the economic upshot is tremendous – businesses will be more competitive and face less paperwork. That makes the opposition to the tax on grounds of personal finances without merit. British Columbians should tune out fear-mongering and embrace this chance for greater prosperity.
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Contact the Jeffrey Team for more information - 416-388-1960
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The roof of the house is going to be a power plant
Tracy Hanes – Yourhome.ca
Homebuyers in the Kingsfield subdivision in Oshawa will have the opportunity to generate energy — and income — from their roofs.
Marshall Homes has become the first subdivision builder in Ontario to participate in Pure Energies’ Solar Power Community, a program to install and service rooftop photovoltaic (solar) systems on new houses in designated subdivisions at no charge to homeowners. They’ll receive a portion of the income produced by their individual system (which feeds energy into the power grid) up to a maximum $1,200 per year.
A system has been installed on the roof of the Kingsfield model home and went into operation last week.
Toronto-based Pure Energies formed last summer to capitalize on business opportunities presented by Ontario’s Green Energy Act, says president and CEO Zbigniew Barwicz. The company, which designs, installs, finances and operates residential rooftop systems has partnered with Suntech Power and SMA America, the world’s largest supplier of solar panels and inverters.
By working with subdivision builders, Barwicz says Pure Energies can deal in volume and provide free to homeowners systems that would normally cost $40,000 to $80,000. Pure Energies will derive income from Ontario Power Authority’s feed-in tariff, which pays 80 cents for every kilowatt hour generated by residential solar PV systems of 10 kilowatts or less, and pay a percentage to the homeowner.
If a homeowner were to install his own rooftop PV panels, a three-kilowatt system would generate about $7 a day, according to the Ministry of Energy and Infrastructure. But such a system would cost about $30,000, making it cost-prohibitive for many homeowners. Pure Energies will enter into a 20-year lease arrangement with the homeowner, who can buy the system for $1 after the arrangement expires.
Barwicz and Marshall Homes owner Craig Marshall were introduced by BILD president Stephen Dupuis.
“I went down there (to Pure Energies) and after 20 minutes, I said ‘I’m in,’” says Marshall. “I think it’s a really cool thing to do. The roof of the house is going to be a power plant.”
Marshall says Pure Energies’ program offers an economically viable way for builders and homeowners to adopt solar PV technology at no cost. It also helps to reduce the environmental footprint of subdivisions and generate more revenue for the homeowner.
“From our perspective, it’s a solution that ties in directly with our long-term goal of building homes that have a zero-energy footprint,” says Marshall.
“Craig’s a visionary,” says Barwicz. “He’s about five to seven years ahead of everyone else.”
Marshall was one of the first builders to adopt Energy Star for Homes as a standard and the first to offer solar-powered hot water heaters and solar geothermal heating and cooling in production homes. Pure Energies will be installing a system on the roof of a model bungalow he’s building at Kingfield, which will be used to showcase the technology to homebuyers and other Ontario builders.
A roof must have south, west or east exposure and have at least 350 square feet of area for the solar panels, says Barwicz. Marshall’s model home faces south and has 900 square feet of solar panels, which can handle a 10-kilowatt system and will yield the maximum $1,200 payback per year. There are about 80 homes in Kingsfield and virtually all of them are suitable for a PV system, says Marshall.
Barwicz believes the program will dramatically accelerate the adoption of solar energy in Ontario by eliminating design headaches and upfront cost for homeowners, while providing them with a performance guarantee and steady source of income over a 20-year period (the provincial tariff program requires a 20-year contract). At the end of the contract, Barwicz says homeowners who buy their systems for $1 should get another 10 to 15 years performance from them.
Barwicz says his company will be able to supply up to 17 megawatts of solar energy systems for the Ontario marketplace in 2010 alone. That is the equivalent energy required to heat and cool 6,000 homes for a year. In terms of reducing the province’s carbon footprint, it’s like taking 3,000 cars off the road and eliminating the emission of 16,000 metric tons of CO2 per year.
“Pure Energies recognizes the tremendous opportunities created by the Green Energy Act and has made a smart decision to invest in Ontario,” said Sandra Pupatello, minister of Economic Development and Trade. “We welcome this investment and the hundreds of new jobs that will support the growing demand for solar energy in the residential market.’
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Contact the Jeffrey Team for more information - 416-388-1960
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HST to ding home buyers July 1
Rob Ferguson – Yourhome.ca
When it comes to the 13% harmonized sales tax kicking in July 1, lots of home buyers and sellers appear to be in for a big surprise, says the Canadian Real Estate Association.
“I run into people who still don’t know its coming,” says association president Pauline Aunger. “There are people who don’t listen to the news or read the newspaper.”
The controversial tax doesn’t apply to resale homes, but it does hit new ones — with a 75% rebate on the first $400,000 of the price tag — as well as real estate commissions, legal fees, home appraisals and moving costs.
Aunger urges people buying or selling homes and condos to close their deals before Canada Day if possible, noting the average buyer of a re-sale home could save about $1,500 by beating the controversial new tax.
The HST is a marriage of the broadly based 5% federal Goods and Services Tax — already charged on the above items and most goods and services — and the 8% provincial sales tax in Ontario, which does not now apply to real estate commissions, new homes and the like.
That means an extra 8% in taxes, although the government notes it cut income taxes Jan. 1 to help offset the HST hit.
For example: the real estate association calculates the additional tax at $80 on typical legal costs, $1,209 on sales commissions, $32 on home inspections, $80 on moving and $24 on home appraisals.
“If you’re buying, go out and buy now,” advises Aunger.
The jury is still out on whether the fast pace of home sales and rising prices is due to the looming HST, because experts say low interest rates are also playing a role.
It’s generally too late to avoid the HST on purchases of new homes because the government has ruled that deals to buy houses after June 18 are subject to the tax, says president Stephen Dupuis of the Building Industry and Land Development Association.
“Since last June, most of what you buy is for closing after this July 1, because most new homes are pre-sold and then it takes time to build them,” he explains. “Whether people know they’re still paying the HST or not, they’re still buying like crazy. We honestly don’t expect a blip after July 1.”
On a new home costing $500,000, the extra provincial portion of the HST totals $40,000. The 75% tax break for the first $400,000 is gradually phased out as the price rises above $500,000.
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Contact the Jeffrey Team for more information - 416-388-1960
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