REHAB. LOANS

Bay of Plenty Beacon, Volume 10, Issue 34, 7 October 1946, Page 6

REHAB. LOANS

SALES TAX ABOLITION POSITION NOT AFFECTED The effect which the abolition og sales tax on building materials might have on rehabilitation building loans is discussed in a statement from the Rehabilitation Board. The statement says there appears to be some misunderstanding current in certain quarters regarding the position, particularly as regards the loan limit of £ISOO.

It had even been suggested that as a result of the sales tax abolition the loan limit had been correspondingly reduced. This was entirely .untrue, the limit having been by no means changed, although certain adjustments had had to be. made in cases where the reduction of sales tax from the contract price had made a substantial difference in the price eventually to be found. In such cases the amount to be paid by the ex-serviceman, and consequently the amount advanced by the Board, would be reduced by the amount of the sales tax no longer payable. This could hardly be termed a reduction in the loan limit. Where it was necessary to advance up to £ISOO to complete a transaction, this would still be done. A somewhat similar position sometimes arose in the. purchase of exservicemen with rehabilitation loans of existing dwellings. The applicant when asked how much he was prepared to put into the proposition might say, for instance, £2OO. The price asked by the vendor might be £I7OO, which meant that the Board would be prepared to advance £ISOO. However, the Land Sales Committee might reduce the vendor’s price to £I6OO. The only altered circumstance £IOO. Therefore assuming that the would be a reduction in price by applicant was still in a position to provide his original £2OO, the Board’s advance would be reduced to £I4OO. The result would be a lesser indebtedness for the applicant, which would be very much to his eventual benefit.

In neither -case, whether the loan was to build or to purchase, was there any suggestion that the limit of £ISOO obtainable had been reduced. In the circumstances mentioned the granting of a loan to the maximum of £ISOO was merely unnecessary.