The former chair of the Windsor-Essex Home Builders Association is praising the Ontario government for providing substantial and immediate support for the housing market.
In last week’s budget announcement, the province revealed it would eliminate the entire 13 percent HST on new homes priced up to $1 million, allowing eligible buyers to receive as much as $130,000 in tax savings. This maximum rebate will also be available for homes valued up to $1.5 million.
Brent Klundert thinks this initiative will make it easier for buyers to enter the new-home market and may encourage hesitant developers to start building again.
“April 1st, those house prices will come down because that tax is removed, and at the end of the day people needing to get into the housing market now, where new possibly wasn’t quite in their budget, all of a sudden with this price adjustment, there may be that many more people that can qualify for a new home versus existing,” said Klundert.
Klundert mentioned that these changes will greatly impact Windsor-Essex real estate since most new constructions fall within this price range.
“That sweet spot that Windsor has because we’re such an affordable place in Ontario to live, I think it’s going to have a huge impact on Windsor-Essex real estate because it directly impacts almost every build that we have here, on the single-family front, on subdivisions, on multi-family, it affects everything that tax cut,” he said.
Klundert, who also serves as president of BK Cornerstone, noted that this decision could motivate developers who’ve been waiting around due to uncertainty in the market.
“At the end of the day, does it mitigate some of that risk? Yes it does,” he said.
“So I do think that when looking at the whole picture developers will say maybe I was on the sidelines, but this is news that pushes the pendulum enough for me to make this investment today.”
The province plans to cover the eight percent provincial share of HST while Ottawa will handle the five percent federal portion.
This program relies on federal legislation being approved and officials estimate it could cost around $1.4 billion for the province.
