HST on Resale

There have been several questions over the past few months on “How will the new HST affect the resale market.” I wanted to try and show on paper the cost to both the buyer and seller on a typical single family home in Peterborough selling for $225,000.

Below are the costs to the buyer in this transaction with a down payment of 5%.

 

Taxable

Service

Current Tax

Payable

HST Tax

New Taxes

Total

Payable

Mortgage Insurance Premiums

$336.66

$538.65

$875.31

Legal Costs

$50.00

$80.00

$130.00

Home Inspection

$16.25

$26.00

$42.25

Title Insurance

$24.00

$15.00

$39.00

Total

$426.91

$659.65

$1086.56

 

In the above example the buyer purchasing a resale home at a cost of $225,000, with 5% down on a 35 year amortization will pay an additional $659.65 in taxes than they are currently paying

 

Taxable

Service

Current Tax

Payable

HST Tax

New Taxes

Total

Payable

Real Estate

Commission

$562.50

$900.00

$1462.50

Legal Costs

$50.00

$80.00

$130.00

Total

$612.50

$980.00

$1592.50

 

In the above example, the seller would have $980.00 in new HST taxes, based on a selling price of $225,000 with a commission of 5%

 

It’s important for all of us to understand how HST will affect our business.  There is widespread misperception that the HST will be added to total purchase price of a resale, which is not the case.

 

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Constantine Isslamow -

Real Estate Broker

Century 21 United Realty Inc. Brokerage

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Constantine Isslamow

Constantine Isslamow

Broker of Record
CENTURY 21 United Realty Inc., Brokerage*
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