A question that comes up from time time is ‘why would I want to pay the GST on a new home when I can buy one without?”
Where I understand the thought behind it, there really is no cost savings. You can actually save some money if you need to pay the Property Transfer Tax.
Let’s say a home is priced at $400,000 plus GST so a final price of $420,000. That same home, if not brand new, would sell for pretty much the exact same price of $420,000 as that is what the market value would be.
Now if you have to pay the Property Transfer Tax (not a first time buyer and purchase price under $475,000) then you actually avoid paying this tax on the $20,000 as you don’t pay the tax on a tax. So the savings here is $400. Not a lot, however, around half the lawyer’s bill!
When I have this discussion with people you can see the light bulb go off in their head! And trust me I’ve had this conversation with many realtors, lenders, lawyers etc.
Just something to think about the next time you’re out looking for a home!