New tax regulations targets new homebuyers

New home construction builders from April 1 will have to obtain provincial sale tax on any new construction or renovation contracts. Saskatchewan construction companies will contribute $345 as tax on a yearly basis to the provincial value. The new regulation will focus on builder labor and their overhead expenses and the revenue collected will be one of the leading contributions towards the government coffers.
But according to Finance Minister Kevin Doherty, there is the likelihood that the tax will go a long way to curb the rate at which people request for home renovation or new home construction.
Yet sill the tax was very essential to create a more consumption-tax. However for constructors, the tax will have a negative impact on affordability says Saskatoon and Region Home Builders’ Association CEO Christiane Guerette. The new tax announcement fails the expectation of the association. She went on to highlight that apart from Saskatchewan, no other province puts a tax on construction labor. This tax will also increase on home prices of newly constructed homes in the region. Furthermore, home builders will now be forced to take on contracts which only involves cash-only and this will have a huge impact on home construction and renovation.
According to Ron Olson, the general manager of Bochum Construction, the new regulation on the part of the housing sector is “draconian”. In the past, Ottawa had embarked on making its Goods and Services Tax to the price of housing while giving discounts to new homebuyers. After this promise, the costs of housing increased three times its normal rate with the discount not aligning with this increase.
New home buyers are left to bear the challenge of this through mortgage payment