HST THREATENS THE AFFORDABILITY OF HOMEOWNERSHIP

 

Starting July 1, 2010 Ontarians can expect to pay a harmonized sales tax (HST) rate of 13% on a long list goods and services that were previously exempt from the 8% Provincial Sales Tax (PST). While the impact of the tax will be felt by all Ontarians, the province’s 3 million homeowners and the thousands who buy and sell a home every year will be hit particularly hard by this latest tax grab.  

 As real estate professionals, REALTORS® know how important the dream of homeownership is to Ontario families. Unfortunately, thanks to the forthcoming HST, that dream is going to become much more expensive. After July 1, 2010, every residential real estate transaction in Ontario will face a significant tax increase. Specifically, home buyers and sellers can expect to pay 8% more on legal fees, appraisals, real estate commissions, condo fees, home inspection fees, moving costs and the provincial government’s recently introduced system of mandatory home energy audits. 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 transaction.

 If the new taxes on real estate transactions are not bad enough, a HST will add 8% more tax on a series of home related costs.  Specifically, a HST will add hundreds, potentially thousands 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. Moreover, a HST will increase the cost of living with 8% more tax on gasoline, personal and professional services, meals under $4, dry cleaning, cab fares, magazine subscriptions, plane tickets, vitamins and cell phone charges.

 When added together, the impact of a HST on Ontario family’s disposable income will be considerable. In short, a HST will reduce the people of Ontario’s quality of life by taking more of their hard earned money to fund government initiatives. 

 While the Government of Ontario plans to compensate homeowners by offering sales tax transition cheques and modest income tax reductions, these measures will in no way offset this new tax. A onetime payment of $1000 (for a family of four) and a modest $368 reduction in income taxes will do very little to offset the burden of an 8% tax increase on a litany of items in perpetuity.

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

  

Vicki Bell, President

Georgian Triangle Real Estate Board

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Carol Ireland

Carol Ireland

Sales Representative
CENTURY 21 Millennium Inc., Brokerage*
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