Prime Minister Stephen Harper announced this week that his government if elected, would help out first time home buyers by introducing a $5000 tax credit, to be rolled out over four years (whatever that means). While on the surface the “simple, modest and practical” plan sounds good (woot, $5000 from the gov’ment!) when you look at it it’s kind of bass-ackwards, and not that much money. Closing costs for a buyer of a property can run into the thousands of dollars, when you factor in appraisals, inspections, lawyer fees, title insurance and/or survey, and the Provincial property purchase tax. Harper’s tax credit would reduce your taxable income by a maximum of $5000, which translates to a maximum cash benefit of $750. And it comes in March or whenever you file your tax return. “Gee, thanks for the help last year when I bought my house and actually needed the money then.“
I think the people who should be making election promises to first-time home buyers should be the Provincial governments. Here in BC, the government collects a tax of 1% on the first $200,000 and 2% on the balance for doing nothing. There is a first-time buyer exemption, but not everyone qualifies. I didn’t, my sister didn’t. Lots of my clients don’t. Obviously, this is a huge cash cow for the government and they’d hate to see it go, but it needs to be reduced or phased out.
Your comments are welcomed and encouraged!
Just use the form or link below this post.
You can bookmark this post using the button below,
or subscribe to this blog for free updates using the big buttons on the sidebar!