An election promise to benefit brokers?

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The resurrected home renovation tax credit being promoted by the federal Conservatives could stimulate the refinance market, according to one broker.
 
“If there is an incentive like that it could encourage homeowners to renovate and potentially refinance,” Gord McCallum of First Foundation told MortgageBrokerNews.ca. “It won’t hurt the refinance business, and that’s the type of business a lot of brokers are going after these days.”

The Conservative government has plans to implement a program that offers owners a 15 per cent tax refund on renovations up to $5,000 if they are re-elected. A timeframe for that program has not yet been established.
 
Some critics, however, believe the proposed credit will encourage owners to renovate instead of sell their homes – and shrink the pool of potential clients for broker originations outside of refis.
 
“There will be the same number of buyers trying to compete for a smaller number of homes that are available on the market,” Realtor Ahmed Helmi with Royal LePage told the Financial Post.
For his part, however, Ad Lakhanpal of Mortgage Alliance argues homeowners looking to sell may also take advantage.
 
“Homeowners often choose to do renovations to sell their homes for a higher price and make it more desirable,” he told MortgageBrokerNews.ca.

Still, a tax break for renovations could encourage homeowners to take out refinance loans to take advantage, which would mean a lucrative income stream for brokers.
 
A similar tax credit was introduced in 2009 with the intention of stimulating the economy, but that incentive offered a 15 per cent rebate on renovations up to $10,000.
But Lakhanpal doesn’t believe the current proposed plan will have the same effect.
 
“Are the renovators starving for business?” he said. “Contractors are so busy and they have so much work as it is.”
 
  • Henry on 2015-08-10 11:14:38 AM

    $5k is a jock in expensive city like Toronto.
    For refinance they have to pay for penalties, lawyer fees, ect.
    Any simple math shows refinance is not worthed for $750 return.
    Another lie from Harper government.

  • okay on 2015-08-10 4:14:46 PM

    Propaganda, lies, manipulations, in conjunction with CREA, media etc. The worst is that it works. Our populous is uneducated, ignorant, narrow minded crowd with TV opinions. I look around and see calculations, house hunting, people jammed on highways and intersections chasing their next mortgage payment, few sunny days but crap otherwise and asking myself a simple question: Are we there yet?

  • MaryAnn on 2015-08-11 1:57:04 PM

    Harper must think Cdn's are stupid. The last incentive had poor reviews to say the least. My reno's were done only months prior to the announcement and CRA said we were not allowed to claim. Then the Feds reduced the purchase + to 40. Really! I wish interior reno's were that inexpensive.

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