TORONTO, ONTARIO--(Marketwire - Oct. 7, 2011) - REALTORS® are calling on provincial politicians to support a provincial rebate for all homeowners who undertake renovations.
"When home buyers are shopping for a home, they often consider its future potential in addition to its current condition. So, the need for renovations and upgrades, either out of necessity or desire, are often factored into their buying decisions. Frankly, this is a good thing because home renovations help to create jobs and generate tax revenue for the government, worthy goals that all provincial politicians should support and encourage," said Richard Silver, President of the Toronto Real Estate Board (TREB).
Home renovations undertaken by Ontario's 3.2 million home owners produced over $20.3 billion in economic activity last year. Unfortunately, a large amount of home renovation work in this province is conducted via the "cash deal" or through the underground economy. According to housing experts at Altus Group, 37 per cent or $5.2 billion of the output from the provincial home renovation industry in 2010 was conducted through the underground economy.
"When given the option, who has not been enticed into saving money by avoiding taxes but unlicensed workers hurt the reputations and competitiveness of legitimate renovation contractors and cost governments and the public greatly," said Silver.
The Ontario Home Builders Association (OHBA) estimates that the underground home renovation economy causes the loss of up to $298 million in HST revenue annually, $1.6 billion in income tax revenue annually and $767 million in other revenues such as CPP, WSIB, Employer Health Tax and Employment Insurance Premiums.
"The underground home renovation industry poses a number of serious risks to home owners. Underground contractors often do not meet health and safety standards, carry no liability insurance and do not offer warranties. Moreover, home owners have little to no recourse in the event of shoddy or unsafe workmanship," added Silver. "For example, if an uninsured worker gets injured while working on a property, the property owner may be held responsible," said Silver.
REALTORS® believe that the best way to mitigate the growth of the underground home renovation economy is to give home owners a financial incentive to use professional contractors. Specifically, REALTORS® are urging all provincial politicians to support the creation of a permanent Ontario Home Renovation Tax Rebate.
"If the provincial government were to institute a renovation rebate, payable to the homeowner, homeowners would be far more likely to insist on a receipt creating a paper trail that would deter underground economic activity. Furthermore, renovations lead to increases in property value, which leads to increases in property tax revenues that would mitigate any potential loss of tax revenue from the Renovation Tax Credit. A further bonus is that many upgrades increase the energy efficiency of properties. A true win, win and win," said Silver.
Greater Toronto REALTORS® are passionate about their work. They are governed by a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Over 32,000 TREB Members serve consumers in the Greater Toronto Area.
The Toronto Real Estate Board is Canada's largest real estate board.
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Contact Information:
Toronto Real Estate Board
Mary Gallagher, Senior Manager Public Affairs
(416) 443-8158
maryg@trebnet.com
www.torontorealestateboard.com