The Saskatchewan government announced earlier this week that it will be applying a sales tax refund for all new homes in the province.
Applicable to residential properties sold starting April 1, the rebate will cover up to 42% of the value of each new home priced up to $350,000 (not including land).
Chris Guerette, the head of the Saskatoon and Region Home Builders’ Association, called the policy “a very welcomed tool for our sector.”
This is because Saskatchewan’s homebuilding sector is considered a “significantly underperforming industry,” a status that has only become graver amid the COVID-19 global outbreak.
Construction has been among the sectors hardest hit by the pandemic, especially with the imposition of work stoppages and social distancing policies by governments.
Guerette noted that permits have noticeably declined year-over-year in January 2020. This is despite data from the Canada Mortgage and Housing Corporation indicating that the province saw 369 new housing starts in the January-February period, compared to the 211 reading during the same time last year.
“We need to do something if we wanted to have an industry that is responding to growth. It’s a phenomenal job-creating industry,” Guerette told the Saskatoon StarPhoenix.
Finance Minister Donna Harpauer assured that the rebate is a product of close collaboration with the top officials of home builders’ associations in Regina and Saskatoon.
“This was a proposal that they came forward [with] that I thought was doable in our fiscal situation at that time,” Harpauer explained. “And I was viewing it more from the affordability side because the stress test was eliminating certain people from qualifying for their down payment. Now I’m viewing it, quite frankly, as an economic stimulus.”