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Many people wonder if they have to pay the taxes when they purchase a home. You should know that when you purchase a used home, you don?t have to pay any taxes! However, if you purchase a new home you cannot avoid paying them. The GST and the PST are added to the purchase price of your new property. Therefore, if you purchase a home for $200,000, you will add more than $30,000 in taxes!

The granted reimbursement is 36% of the total of the GST and PST. The maximum reimbursement for the GST is $8,750 and for the PST it?s $5,642. The higher the purchase price, the lower the reimbursement is.

When the purchase price exceeds $450,000 there is not a GST reimbursement available. For the PST, the maximum is fixed at $225,000.

First of all, at the time of sale, the contractor must bill the buyer for the GST and PST. It is possible to recuperate a part of these taxes, however you need to meet certain conditions:
¨ The property and the land are acquired during the same transaction
¨ The property is a building with one apartment or co-ops
¨ The property title is transferred to you when the construction/renovation is complete
¨ You, or someone close to you, is the first occupant after the work is completed
¨ The property is your, or someone close to you, usual residence
¨ The property?s purchase price is less than $450,000 to have the right to the GST reimbursement and less than $225,000 to have the right to the PST reimbursement.

If you meet these conditions, your contractor can pay the GST and the PST reimbursements directly to you or credit them.

One thing to note: you have two years to apply for the reimbursements from the date of the transfer of the property. It is important to apply as soon as possible so that you may profit from them quickly.

During the process of buying a new home, for each contractor contacted, ask them about their method of tax reimbursement. After all it is your money! It?s better to have it in your pocket and reinvest it how you want than giving it to the government and contractors.

Also, if you make major renovations, you can have the right to these same reimbursements. The government considers major renovations as:
Repairing or transforming an existing building completely or almost (90% or more), taken out or replaced, with the exception of the foundations, exterior walls, interior support walls, flooring, roof and stairs.
Remember that when you purchase a new property, you have the right to receive the GST and PST reimbursements! If you don?t know or don?t apply for them, someone somewhere will profit from your ignorance.

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Many people have asked themselves this question before purchasing a property. It is necessary to know all the different advantages and disadvantages for each of these choices. It is in your best interest to review these before making a decision.

It will often arrive within a couple that one prefers purchasing a new home while the other would prefer a used one. This might remind you of your situation or someone close to you.

We will start by identifying the different points for purchasing a new home and a used home. Then we will create a comparison sheet listing the advantages and disadvantages for both types of properties.

A NEW HOME?

If you decide to purchase a new property, you should verify that the contractor you have chosen is licensed and registered. Also verify his record, if he doesn?t have any complaints in his file, then you can be pretty sure that you can have confidence in their work.

Once you have selected a contractor, you will then need to select the model you want and how you want it completed. For example, what type of flooring do you want? Hardwood floors, laminate, ceramic, etc? Contractors normally do not include the costs of these popular materials in their first estimate. Therefore, after adding these choices to the base model, your final invoice will be higher.

Remember to ask your contractor if the GST and the PST are included in the price. When purchasing a new home, you are responsible for paying both taxes according to the purchase price. For example, if you purchase a home for $200,000, the taxes will total more than $30,000!

In the original negotiated price, the basement is unfinished, and the landscaping, excavation, paving of driveway, and the fence are not completed. You should expect an additional cost of at least $20,000 for these items. This amount can be higher depending on the materials used and the square footage of your land.

It is recommended not to decorate (except painting) during the first 12 months. This will allow you to see any cracks that appear and repair them.

One other point to keep in mind is to take the time to visit the construction site often. This way you can check the progress of your home and verify that things are being completed according to the approved plan. Make sure that the framing is being done according to your approved floor plan. Once the work has been completed, it is too late to make changes. You might have heard of someone that has faced this situation and know that it is very unpleasant.

On average, you will spend at least 100 hours of your time on the construction site. This is an investment of your time that will allow you to better understand the construction of your home and verify the quality. Remember the saying, ?Time is money??

A USED HOME?

If you decide to purchase a used home, you should visit several different ones before deciding on the one that fits you. Don?t believe that the first one you find will be the perfect one, you risk being disappointed.

When you visit a used home, you have to be able to look past existing color schemes and decorations, especially if you don?t like them. You have to have the sense of observation and the capacity to visualize the changes needed in order to make the home yours.

There can also be several ?small renovations? to complete that will demand not just your time and skills, but also a good amount of patience. You will not be able to complete everything at the same time; it is better to space out the projects.

Try not to pay too much attention to the cleanliness of the home when visiting. They might not have the same amount of time as you will have to devote to cleaning. Or, maybe they just don?t have the same obligations or principles as you. However, it?s definitely better to visit a neat and tidy home that will leave you with better memories. Always keep in mind the two most important things, the floor plan and work needed.

You should always verify the roof, windows, plumbing, electricity and foundation of the home. If there are repairs to be done, you need to know about them so that you can plan financially. These repairs can considerably modify your original budget.
New Home VS. Used Home
You will find that the main advantages listed for a new home will become the disadvantages for a used home and vice versa.

New Home ? ADVANTAGES

- Has never been lived in;
- All accessories are new;
- The neighborhood is generally new;
- Floor plan is designed to your taste;
- You can add accessories to the plan before signing the contract (i.e. Adding a fireplace);
- No major repairs will be needed for the next couple of years;
- You can apply for grants/loans;
- You can use your RRSP if you meet the requirements;
- No inspector is needed to verify the construction.

New Home ? DISADVANTAGES

- Must pay the GST and the PST according to the purchase price;
- Might not be completed by the date promised;
- Landscaping will not be completed;
- Basement will be unfinished;
- Yard will not be fenced;
- Driveway will not be paved;
- It?s not possible to decorate for a certain period of time;
- It?s possible to find omissions or errors in the construction;
- If the neighborhood is under construction, this will mean noise and dust for a certain time period;
- You must pay the transfer tax (Welcome Tax)
Used Home ? ADVANTAGES

- You do not pay the GST and the PST when you purchase a used home. You can therefore apply this amount towards renovations or purchasing a better home;
- Generally, the basement is finished, landscaping done and the yard is fenced. Everything is included in the purchase price;
- You will have an idea of how the house looks because you have already visited it;
- The area is usually already developed, therefore you will not have construction noise or dust to deal with;
- You can start renovations on your property without having to wait;
- You can use your RRSP if you meet the requirements.

Used Home ? DISADVANTAGES

- You will need to paint the home according to your tastes which will require you to invest a certain amount of time;
- You will need to plan financially for repairs to the roof, windows and any other possible major repairs over the next couple years, or sooner;
- You will have a major cleaning to do when you arrive. The previous owners might not have left the home clean and you will probably want to get rid of any bad odors;
- The previous owner might have purposely hid information regarding the state of the property leaving you with problems you weren?t expecting;
- You cannot receive certain government grants/loans;
- You must pay the transfer tax (Welcome Tax).

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There are some financial aide programs available to help you purchase a property. However, this aide is not always available and/or can be delayed for several months up to a year.

Currently, the most popular financial aide program is the HBP (Home Buyers? Plan), which is offered by the federal government through your RRSP. The other programs available are usually offered by local governments in order to entice you to relocate into their area. These programs can be in the form of municipal tax breaks or subsidies.

In order to better inform yourself about existing program types, requirements, restrictions and other specific details, contact the local municipal office. They will be able to provide you with all of the necessary documents. Also, some real estate agents will inform themselves on the available programs in order to better to serve their clients. Ask your agent if they provide this service.

Most of the known programs are designed to help in the purchase of new properties, a property that has never been lived in before. This is to allow for local regional development, new job creation and new citizens who will eventually pay municipal taxes.

However, there are also programs designed to help buyers purchase used properties as well. These subsidies are generally allowed for the restoration of abandoned properties or those located in protected historical areas. Cities want to conserve these historical sites in their local areas. The financial aide granted can be up to 50% of the projected costs or a fixed amount (ex: $50,000).

Always verify with the government and local municipal office what is available for your specific situation. You can only receive what you ask for.

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A new year has arrived and it is the time of resolutions and promises. If you plan on decorating a room in your apartment or home, take a minute to read the information below.

Wallpaper

You would like to decorate a room in your home with wallpaper, but you don?t think you are capable? All that is necessary is to be well prepared with good materials, such as quality wallpaper, and above all to have patience. Hanging wallpaper is not something done quickly; you must take your time. It is recommended that you use the breakers to cut the electricity if you plan on working with water.

In order to buy the correct number of rolls, you need to measure the walls of the room. Then present these measurements to the specialist at the store who will be able to complete the final calculations for you. Wallpaper is a great decorating tool and it can hide defects in the wall!

Recycled paint

For some time now, you have been able to find cans of recycled paint in your local stores. Some consumers have expressed concern over the quality of this paint. However, according to several people that have used it, the quality is amazing and the price is good.

Instead of paying $30 and more for 4 liters of pain, recycled paint costs between $10 and $15 for the same quantity. If you are hesitant, you can try one room in your home and then decide. However, you are sure to not be disappointed!

Winter is a difficult season for certain properties. The most common problem is the appearance of cracks. You will find this problem in all recently constructed buildings. If you see cracks don?t worry, just monitor them closely. If with time they become larger, call a specialist. They use products specifically designed to fix this problem.

It is also important to verify if the cracks only appear inside the house. If your basement is finished, verify if there is water and/or humidity. If this is the case, don?t wait any longer!

Sub-flooring

Are you thinking of installing carpet, ceramic tiles, hardwood or a floating floor? Before starting, make sure that the surface you are covering is clean and level. If you are not sure, start by installing a plywood sub-floor. Therefore, you can be sure of a solid foundation that is resistant, durable and smooth for the flooring chosen. This will only help in your work. The sub-floor will also allow you to protect your investment.