What To Know About Taxes

April is the season where taxes are on everyone’s mind. So, what better time for discussing what you should know about taxes before you begin your timber frame home? While taxes may not be a crucial part of your project focus from the start, knowing the basics brings you a better understanding of how they affect your budget. Here are some valuable tips from our vice president of finance, Kym Hurst.

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. To estimate taxes, you first want a solid understanding of what you plan to spend on your home. With a base whole home cost, you can estimate how much tax to add to your budget. As a consumer, you’ll also want to understand the differences between “use taxes” and “sales taxes”. 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 Affects Taxes?

What taxes are applied, and how, are both heavily impacted by where your build site is and its area stipulations. Canada and the United States have substantial differences in taxes, as do different provinces, states, counties, and cities. Whether you are building on raw land, or on land that once had a home on it, also dictates what is taxed. 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.

Who Do I Talk to About Taxes?

Your accountant or financial advisor will be your primary contact regarding taxes through all stages of your project. This is because, while your contractor is another resource, your financial advisor is better qualified to inform you about specific tax laws that apply to each phase of your building process.