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What to Know About Taxes

Tis the season where taxes are on everyone’s mind, so what better time to discuss what you should know about taxes before you begin your timber frame home project. While taxes may not be a crucial part of your project focus from the start, by knowing the basics, you can have a better understanding of how they will affect your budget. Here are some valuable tips our Vice President of Finance, Kym Hurst, had to share.

Who should I talk to about taxes?

Your accountant or financial advisor will be your primary contact regarding taxes through all stages of your project. While your contractor is another good resource for help, your financial advisor will be able to best inform you about tax laws that may apply to phases of your building process.

When and how will taxes start affecting my project?

When you initiate a contract with your timber frame home provider, you will begin to see taxes show up. In order to estimate taxes, you must first have a good understanding of what you plan to spend on your home. With a base turnkey cost you can estimate how much tax to add to your budget. It is also critical as a consumer to know the differences between “use taxes” and “sales taxes” when you self-assess. Your financial advisor should be able to help you with all of these factors so you are better prepared as you proceed.

When during my project will I be taxed?

Taxes will fluctuate from project to project depending on several factors including your location. Since the building of a timber frame home is a complex process with several stages, there is a possibility that many areas of your project can and will be taxed. Aside from a property tax that you will encounter, there may also be a tax on materials and/or labor as well as a home tax or new home tax.

What about my project will affect taxes?

What taxes are applied, and how, are both heavily impacted by where your build site is and its area stipulations. On an international basis, Canada and the United States might prove to have major differences in taxes, while state-to-state or county-to-county may show tax changes on a smaller scale. Whether you are building on raw land, or on land that once had a home on it will also dictate what is taxed on your project. All of these aspects we’ve listed can be discussed with your general contractor and will help to make you aware of the taxes applied so that every stage of your project may run more accurately and efficiently.