The former chair of the Windsor-Essex Home Builders Association is applauding the Ontario government for delivering meaningful and immediate relief for the housing sector.
Announced in last week's budget, the province said it would remove the full 13 per cent HST on new homes priced up to $1 million, giving eligible buyers as much as $130,000 in tax relief. That maximum rebate would also apply to homes valued up to $1.5 million.
Brent Klundert believes the measure will help buyers enter the new-home market and could pull hesitant developers back into building.
"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 said the changes will significantly influence Windsor-Essex real estate, as most new builds fall within the eligible 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 is also president of BK Cornerstone, said the move could encourage developers who’ve been waiting on the sidelines, because it helps reduce 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 will cover the eight per cent provincial share of the HST, while Ottawa will cover the five per cent federal portion.
The program depends on federal legislation being passed, and officials estimate it will cost the province about $1.4 billion.