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.
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