New homebuyers may see big savings when the new 1% reduction in GST takes effect in January 2008. It will also help existing homeowners to pay for home renovations, new appliances or furniture. The federal government claims that Canadians spend an average of $7,475 on renovations when they buy a home, and spend another $3,950 on furniture, and appliances. Based on these figures, the GST cut represents $114 in savings.

The Canadian Home Builders Association offer the following guidelines for home renovations and how GSt is applied.

- Renovations done before or after January 1, 2008 but invoiced on or after that date will qualify for the 5% GST rate.

- For renovations done and invoiced January 1, 2008 but subject to a down payment before January 1, 6% will be collected on the down payment and 5% on the rest of the fee.

- For renovations done after January 1, 2008, but subject to a deposit paid after January 1, the 5% rate applies. A deposit is not treated as a payment for a supply of goods or services until the supplier applies it against the consideration payment of the supply.