I'm intrigued. "Follow the money" is often the ulitmate answer in business and politics. So, let's look at this from the other side. Say I'm buying a house that I have a company/contractor build for me. They have a GC and some of their own subs as well as others they hire. Each business has their "Resale number" so no one pays taxes up front. Now when the house is done, I come along and pay for it with a mortgage, but (at least in Minnesota) I do not pay any sales tax on the house purchase. So what happens to the sales tax that is supposed to be collected? Is the house purchase price artificially inflated by the builder to accomodate what the contractor should send in to the state? When one sub does work for (sells their services to) another one how does this tax get paid?

KHoene- You can do this!!! We are building our third house now and I can honestly say it is not rocket science. If you are well organized and have good communication skills, there is no reason you can't save yourself a big chunk of money by being your own general contractor. There are lots of great resources complete with sample contracts available on line to help you. http://www.buildahouseyourself.com/ is one that I've used myself. Don't get me wrong, contractors do make things easier for the builder. We have many friends who are contractors and my husband has worked with contractors for over 20 years with his work. But most just follow a step by step process and stay on top of things. One just this week was saying how people can save themselves a lot of money just by doing what he does for themselves. A friend of mine who is a stay at home mom was the general contractor for their home two years ago and they saved a lot of money and had NO problems. Their home is beautiful and she had never done anything like that before. She was just extremely organized and on top of things. You know what your skills are better than any of us. Time to oversee the project and make sure that everything is completed appropriately and timely will be the most difficult aspect of the process. Good luck on your adventure!!!

YES! It can be done, but you need to be prepared and the "type" to be able to do this. My dh and I are about 2 months shy of moving into our 4100+ sq ft dream home. We could not have done this without being our own GC (for the entire project) and doing a fair amount of work our selves. That along with 4 boys under 8 years and pregnant again (now). It has been somewhat stressful and more time consuming than imaginable. I don't work outside of the home and gc'ing this one. We could not have done this had I not been available so often. We have a strong 14 year marriage and it just seems amazing that we have accomplished this together. YES there is tension, Yes lots of hardwork, YES not enough time with the kids. On the flip side it has been WORTH IT! We have a large, dream home to raise our family in that we can still afford. We did tons of research and we have been very organized throughout and that is necessary. Read some initial books and see if it is something you want to do and have the TIME to do. Best wishes!

I was talking advice regarding forward planning. Quite likely some tax preparers, and even more so, accountants, could show most of us ways that we could arrange our personal financial affairs to reduce our tax load in future years ... at least, with regard to the rules governing the income tax system, at present. In addition, I've suggested that every senior should have a home-based business, to allow some nice deductions. I think that that works in the U.S. as well as Canada - get the tax book explaining how to do tax on a small business. Preferably as a consultant rather than peddling goods, with all of the purchase of stuff, ship, store, loss, ship, losing payment hassles so involved. If you can do it on the internet ... ... all that you have to do is keyboard ... then press "Send". And if your ideas are useful to a number of people ... perhaps you could press "Send" once ... ... and have the message go to 50 addresses, all at once: no stationery cost. And 50 fee-payers. Plus if some don't get around to paying ... they don't have goods in hand that cost you money to purchase, ship, store, ship. No postage cost - and your internet connection would be (partially) deductible. Same for computer. Canadians need to be careful, for if they claim certain aspects of their home-based business, e.g mortgage interest and possibly some other less apparently house-related items, they may jeopardize that precious exemption from income tax liability on capital gain on sale of their home that was owner-occupied throughout (i.e., it was partly used for business, so part of the capital gain exemption might be disallowed). For example, just today on Yahoo Canada, regarding personal finance and retirement, one planner with 35 years' experience suggested that he'd suggested to quite a few seniors that, in order to make their RRIF (personal tax-deferred retirement plan) payout deductible, they could make a major loan for investment, using their house as collateral, agreeing with the lender to pay (deductible) interest at the amount of their annual RRIF payout. That is, if their RRIF's annual payout were $6,250.00 and they made a loan of $100,000.00 at 6.25%, the RRIF payout would become tax-free, offset by the deductible interest on the investment loan. He said that he has not had any couple take up that suggestion, everyone being afraid to stick their neck(s) out. Investing in solid, quality stocks, they would likely earn a substantial amount of dividend income ... which, if it were paid by Canadian corporations, would be taxed at a low rate. And could be used to pay a good deal of the interest cost on the loan, thus making a portion of the RRIF payment available for other uses. Maybe have certificates issued, at probably $35.00 - 50.00 each, as extra collateral in case the value of the house goes below the collateral limit and the bank makes a margin call - I have never received one, but always have extra asset available - I don't like a hassle. My bank told me yesterday that my interest rate on Line of Credit loan used for investment would now be at prime, i.e. 5.25% - it was 6.25%, a couple of months ago. I said that, at the earlier rate, I could borrow for almost no net cost. So at the 5.25% rate, I would be ahead on the game, even if I made no capital gain. And I think that the rate of inflation is somewhat higher, lately, which would help all the more! That makes more sense to me than borrowing some of the value of the house ... and spending the money on consumption. I think that some tough days are coming when we'll be glad for every dollar of asset and income that we possess. Good wishes for skillful money management, everyone. Including tax-avoidance plans (but not evasions: jail bait). ole joyful