What Effect will HST have on Your Real Estate Transaction When You Buy a Home?

HST will be implemented on Prince Edward Island on April 1, 2013. What impact is this going to have on your real estate transaction when you buy a home? HST will impact you differently depending on whether you are buying a lot and building a new home or purchasing an older home.

Neither PST nor GST is currently charged if you are purchasing a pre-existing home. The same will apply for HST. You will NOT pay HST on a pre-existing home when it is implemented.

HST will be charged on new construction homes and lots that are owned by developers. For example, if a lot sells for $50,000, presently GST is charged which would add on $2500, for a total price of $52,500. Once HST is implemented, 14% of the price, in this case $7000,  would be added to $50,000 for total price of $57,000.

The news is not as bad as it sounds for new construction. Under HST there will be tax rebates available to companies for materials and labour which will compensate for some of the HST increase. It will be important to discuss with your builder how these rebates will be passed along to you.

 

Do you have more questions about this topic? Our REALTORS are here to help you. If you would like more info on this or other real estate topics go to www.5662121.com and join us on facebook where we discuss in more detail.

There are no comments

Thank you! Your comment has been submitted and is awaiting approval.

Blog Archives

Tags