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Will I Pay HST? Help I’m living in a bubble!

December 16, 2009

I’m sure you’ve heard by now unless you’re living in a bubble (no, not the Real Estate Bubble – that’s another story!), the provincial government has announced that it intends to combine the eight percent Provincial Sales Tax with the five percent federal Goods and Services Tax, creating a 13%  Harmonized Sales Tax (HST).

Recently, I’ve had an increasing number or clients and buyers asking questions about the HST and how it will affect their real estate situations.  Some people have accepted it, others have been quite upset and said they will not buy real estate if there’s going to be HST applicable on it.

As with all changes to legislation, there’s potential for confusion.  I thought it timely to give some basic background on how the new HST will affect you if you’re thinking of buying a new home or condo once the HST has taken affect.

And here it is:

  • The HST is NOT YET IN EFFECT.  The provincial government has indicated that it intends to bring the HST into effect beginning on July 1, 2010; however, note transition rules below;
  • HST will not apply on the purchase price of re-sale homes.; HST would apply to services such as moving costs, renovations, legal fees, home inspection fees, and REALTOR® commissions;
  • HST will apply to the purchase price of newly constructed homes.  However, the Province is proposing a rebate so that new homes across all price ranges would receive a 75 per cent rebate of the provincial portion of the single sales tax on the first $400,000 of the purchase price.  For new homes under $400,000, this would mean, on average, no additional tax amount compared to the current system.

If you’re wanting to discuss how the HST will affect you, please feel free to contact me either by email or phone at (905) 507-0040 ext.22.  I’d be happy to discuss your real estate needs.

Ryan

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3 Comments leave one →
  1. January 12, 2010 1:58 am

    Great article. We would love to feature this article in our ‘Persectives’ column. If you’re interested, please write back.

    • January 12, 2010 3:05 pm

      Thanks for visiting and your kind words. I’d be happy to have you feature the article!

      Cheers!
      Ryan

  2. January 12, 2010 9:52 pm

    Hey Ryan,

    Your article is online under the ‘Perspectives’ column on the main page. Please let me know if it is to your satisfaction. Thanks,

    Isaac

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