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How will the HST impact you as a home or condo owner?

March 2, 2010

By now, the majority of home owners and home buyers should know about the HST and its potential impact to real estate in Ontario.  If you don’t then you need to subscribe to my blog and/or read it more often. 😉

The HST or hamonized sales tax comes into effect July 1, 2010.  This means that home buyers and sellers will pay 8% more on legal fees, appraisals, real estate commissions, home inspection fees, and moving costs, adding about $1,500 in new taxes to the average residential real estate transaction in Ontario.

For current homeowners the HST will also add hundreds of dollars in additional tax on utility 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.  If you rent a home or condo and you’re responsible for your own utilities, pay attention this affects you too.

Quotes:

“The Government of Ontario can try to sell the HST any number of ways but starting July 1, 2010 the taxes on buying, selling and owning a home in our province will go up,” said Pauline Aunger, President of OREA.

“Ontario’s housing market is vital to the health of our provincial economy,” said President Aunger. “An HST on homeownership will reduce housing affordability and increase the tax burden for Ontario families.”

“In the last decade, Ontario’s homeowners have faced a barrage of government imposed costs,” said President Aunger. “From municipal land transfer taxes to sky rocketing property taxes and now the HST, homeowners are once again being forced to foot the bill for this government’s legislative agenda.”

Quick Facts:

  • The HST combines the PST and GST into one value added tax, meaning that the 8% PST will be applied to list of goods and services that were previously exempt. The government plans to begin charging the HST to consumers on July 1, 2010.
  • OREA estimates that the new tax will add $1,449 in new taxes to an average resale home costing $302,354.
  • OREA also estimates that the HST will add an estimated $262 million in new taxes annually to residential resale real estate transactions.
  • Homeowners will also have to pay an additional 8% on many services required to maintain their homes. These services were previously exempt from PST and include utilities, home renovation labour, landscaping, snow removal and many others. OREA estimates HST on these services will add $480 in annual tax to the homeowner (based on a family that budgets $500 per month for such costs).
  • Ontario’s real estate industry is essential to the provincial economy. In 2008, real estate in Ontario accounted for $56.6 billion in sales, $6.01 billion in ancillary economic spending and $1.35 billion in land transfer tax revenue to the provincial government. In addition, independent research indicates that resale housing market creates 80,000 direct and indirect jobs.
With files from OREA. Source: Canada News Wire
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One Comment leave one →
  1. May 2, 2010 10:04 pm

    Dalton McGuinty made a deal with the devil in Ottawa for one and only one purpose. That purpose was to extract more money from Ontario tax payers. Any other excuse or pathetic explanation is just political nonsense. The new HST is going to have a damaging influence on many parts of the economy, both directly and as the result of a ripple effect.
    As usual the government has acted in its own self interest and stuffed this new tax down our throats. Let us not forget this when election time comes around.

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