Finance committee  Well, yes, they will benefit because they're taxed and they cannot.... Many of their supplies are exempt. When you have exempt supplies, you cannot recover the tax you paid on the purchase.

Finance committee  In your scenario, the Budget Implementation Act provides a transitional rebate. If your deal has been signed before budget day and ownership and possession is transferred in September in your example, the builder has to remit based on the 7%.

Finance committee  Because this is the transitional rule we provided for residential complexes in the legislation. What is happening now is that the purchaser will be entitled to that special transitional rebate of 1% of the tax, and they have to file a rebate claim with the CRA. Taking into account the fact that he gets the new housing rebate, he will receive this rebate sent directly to himself.

Finance committee  Yes, CRA will put out a publication and the form to explain that. The tax change will be publicized in the way they usually are, mainly by CRA and by the fact that the budget bill received publicity and things like that.

Finance committee  The 1% of the--

Finance committee  Well, usually the sale of a house is made on a written agreement. It's a very long agreement usually, but the tax will be written in there, so if they know that the house is not even built, or something like that, and they know that ownership and possession will be after July 1, the rate should be 6%.

Finance committee  Well, they should look at their agreement to see that the tax rate is actually 6%. I'm not sure if you're referring to people who may have signed an agreement before—

Finance committee  Okay. Well, the best advice we can give is to look at your agreement to see if the rate of tax is 6% and not 7%.

Finance committee  A lot of time the new housing rebate is taken into account in the price of the home. It's a fixed price for a home that takes into account the fact that if the ownership and possession is on or after July 1, the agreement may take into account the fact that the tax is at 6% and that the purchaser is entitled to a rebate, which will be based on a 6% tax.

Finance committee  It's because besides following the price of houses and seeing that the price of a certain development drops before and after July 1, I'm not sure how to answer your question. People should ensure that they can see that the tax is actually at 6%. Usually you buy a house through a lawyer, and your lawyer should check that the rate is actually 6% and not 7%, if ownership and possession is transferred on or after July 1.

Finance committee  First, if a builder decides to increase the price of his house because his costs go up, that's what we call a consideration for the supply. But if by mistake a rate of 7% has been charged on a new house, where ownership and possession is transferred on or after July 1, there's always a rebate for tax paid in error.

Finance committee  The budget implementation act includes transitional rules for the sale of new homes, and the main rule is that if ownership and possession of the new house occur on or after July 1, 2006, the rate of 6% will apply.