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Real Estate Update On HST

HST and Real Estate Update

The new Harmonized Sales Tax (HST) is "scheduled" to come into effect July 1st, 2010.   The main objective is to combine the current 8% Provincial sales tax with the 5% federal GST tax, creating a new 13% harmonized tax - the new HST tax.

This is a basic overview of how it will effect the real estate industry.


 

  • Who will pay this new tax?

• HST will not apply on the purchase price of re-sale homes.
• HST will however apply to services such as moving costs, legal fees, home inspection fees, labour for renovations, landscaping and REALTOR® commissions. 

An example:   A typical Lawyers closing fee of $1,200 @ 5% GST is currently $60.00, with the new 13% HST the tax would be $156.00. 

According to the Ontario Real Estate Association (OREA) Ontarians will pay, on average, an additional $1,449 in new taxes on their next residential real estate transacation. 

The Cost for "New" Housing (not applicable to resale):
All price ranges would receive a 75 percent rebate on the provincial portion of the single sales tax on the first $400,000. up to a maximum rebate of $24,000.

Therefore, new homes under $400,000 would not be subject to this additional new tax.

We can expect a strong resale market in the first quarter of 2010.  It will be a race to save the tax.  Reminds me of the day when the provincial government introduced the Toronto Land Transfer tax.  There was a flurry of sales taking place to beat the deadline.

The new HST tax will not apply to sales of new homes where ownership or possession is transfered before July 1st, 2010.

If you are interested in more details kindly visit the provincial government site.


 

Do you qualify for a potential Tax Credit?  

Its not much but,
 cash payments would be provided to Ontario tax filers, in each of June and December 2010, and June 2011.

 

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Eligible families with income of less than $160,000 would receive 3 payments "totalling $1,000."

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Eligible individuals who earn less than $80,000 would get 3 payments totalling $300.

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To qualify for the 2 payments in 2010, a 2009 tax return would have to be filed.

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To qualify for the 2011 payment, a 2010 tax return would have to be filed.

 


 

The HST will effect our daily lives whether we are home owners or renters:  

The HST will add hundreds, potentially thousands of dollars in additional tax on utilitiy bills, such as gas, electricity and home heating fuel, on home renovation labour, the cost of lawn upkeep or landscaping and the cost of snow removal. 

Moreover, the HST will increase the cost of living with 8% more on gasoline, personal and professional services (that's a long list), meals under $4.00, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges!  

Help oppose this latest tax grab.  Write to your MPP and tell them that Ontarians do not need higher taxes on homeownership.

 

Do you have a Real Estate Question?

Simply Call 416-896-3333 and ask for the Branch Manager.  We're here to help.  
Buying, Seller or Leasing and definitely if you have questions about the Ontario and TorontoLand Transfer Tax or HST.


Visit us at www.SuttonRealty.com



Contact us by email

 

 

Posted: Tuesday, January 12, 2010 2:01 AM by Sutton Realty

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